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The sino-us trade dispute roiled the metal market

» NEWS » The sino-us trade dispute roiled the metal market

The sino-us trade dispute roiled the metal market

May 24, 2019


A trade dispute between China and the United States is the main cause of metal price volatility, industry sources said in Hong Kong this week, as market participants brace for continued sharp changes.

Global financial markets were dealt a blow this week by the turn in the sino-us trade talks, with investors facing the prospect that a 10-month trade war between the two countries could escalate rather than end.

US President Donald trump threatened over the weekend to raise tariffs on Chinese imports into the us, senior us trade officials said on Monday. The new tariffs are set to take effect on Friday.

David Wilson, commodities strategist, said renewed trade tensions were making trading in metals more difficult.

“It’s very dramatic and obviously the problem we have is that we don’t know what trump is going to say next on twitter, which makes it extremely difficult to trade metals,” Wilson said at the LME’s Asia conference in Hong Kong.

In August, three-month copper on the London metal exchange fell 20% to less than $6,000 from a June high of nearly $7,350.

LME copper for three months fell to a 2-1/2-month low hit last week on Tuesday, weighed down by demand concerns after U.S. President Donald trump said he would raise tariffs on Chinese imports ahead of talks between the two countries.

LME markets were closed on Monday for a British bank holiday in early may.

In an audience response to the LME Asia conference, 57 per cent of respondents said they expected trade tensions and political risks to be the top issues affecting metals markets this year.

One industry source said the possibility of more twists and turns could not be ruled out as the us and China try to reach a trade deal, an uncertainty that could further disrupt metals markets.

He added: “when we hear reports that the us and China are moving towards an agreement, the market should not be too satisfied. From a trading perspective, we should always keep in mind that… “” we could face a lot of volatility.

Should ask spoke Tuesday, a commerce ministry spokesman said, should the us trade representative, Wright jersey, finance minister, Mr Qin, at the invitation of the political bureau of the CPC central committee, vice premier of the state council, the comprehensive economic dialogue with China led liu crane on May 9 to 10, to visit the United States, the 10th round of negotiations with the United States is economic and trade issues.

Another executive said there were some encouraging economic signals for metals demand in China in the first quarter.

“Clearly, so far this year, especially in terms of demand, the Chinese side has become more optimistic and the rest of the world has become more pessimistic,” he said. Optimism about China has returned strongly.

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