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The most-traded July copper contract price on the SHFE dropped to 51,210 yuan ($7,980) per tonne as at 10.50 am Shanghai time, down by 500 yuan per tonne from Tuesday’s close.
The dollar index hit a fresh 2018 high of 95.03 during trading on late Tuesday afternoon.
“Copper, the proxy that investors use for global economic growth, was weighed down by the stronger dollar,” ANZ Research noted on Wednesday.
Further pressuring the red metal was the pick-up of trade tensions between the United States and China overnight which has dampened investors’ appetite.
The US announced overnight that it will proceed with imposing 25% tariffs on $50 billion-worth of goods imported from China, reigniting a trade war between the two nations.
“China’s commerce ministry released a statement shortly after urging the US to stick to their previous agreement of a meaningful reduction in the trade surplus and noting that China remains confident it can protect the nation’s interest,” ANZ Research added.
Tin was the most resilient of the SHFE base metals this morning, finding support from concerns over tightening raw material supply.
The SHFE September tin contract price edged 30 yuan per tonne higher to 154,700 yuan per tonne as at 10.50am Shanghai time.
“Chinese smelters may have trouble producing enough metal due to falling supply of imported tin concentrate from Myanmar,” Andy Farida, analyst at Metal Bulletin, said. “Therefore, a supply crunch scenario might emerge again,” he added.
Tin stocks at SHFE-listed warehouses fell 590 tonnes to 6,854 tonnes as of May 25.
Other base metals prices under pressure
Currency moves and data releases