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Nickel led the complex lower with the most-traded September contract falling to 114,890 yuan ($17,661) per tonne as at 11.30am Shanghai time, down by 1,780 yuan per tonne or 1.5% from Monday’s close.
The weakness in SHFE nickel prices this morning follows a 3.6% slump in the three-month London Metal Exchange nickel price at the close on Monday, with the latter trading back below $15,000 per tonne.
“There was no particular catalyst behind last week’s selloff, but we have to suspect that growing trade tensions across both sides of the Atlantic, as well as between the US and China are unnerving markets, with base metals being among those most affected,” INTL FCStone analyst Edward Meir said.
“Far from moving towards any de-escalation, the Trump administration continues to ratchet up the pressure,” he added.
Asian stocks opened broadly lower on Tuesday in response to the fears of an escalation in the tit-for-tat trade dispute between China and the US, with most of the base metals following suit. The exceptions being zinc and lead, with the latter showing steadier gains than the former.
“Lead’s fundamentals remain price supportive, with declining global stocks, record low treatment charges – which suggest a tight concentrate market – and a supply deficit in the first quarter of 2018 to boot,” Metal Bulletin analyst Andy Farida said.
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