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Copper Struggles to Find Direction Amid Trade War Fears

September 11, 2018 at 18:24 by Andrew Moran

Copper futures are struggling to find a direction on Tuesday as investors remain cautious about the trade dispute between the world’s two largest economies. Investors fear that a global trade war could spark a decreased demand in metals and a slow down in economies.

December copper futures dipped $0.007, or 0.27%, to $2.621 per pound at 17:48 GMT on Tuesday on the Comex division of the New York Mercantile Exchange. The industrial metal has been on a modest upward trend over the last trading week, but it has failed to significantly rebound from its 3% plunge since the beginning of August.

On Friday, President Donald Trump revealed that he is considering slapping an additional $267 billion in tariffs on Chinese goods, which would be on top of the $50 billion already enacted and the $200 billion poised to be instituted. This means that virtually all Chinese imports would be subjected to levies.

China’s Foreign Ministry confirmed that it is monitoring the situation and will retaliate if the US implements other trade measures.

Foreign Ministry spokesperson Geng Shuang said in a statement:

If the United States insists on imposing another round of tariffs on Chinese products, China will definitely take countermeasures to safeguard its legitimate rights and interests.

This comes as new data found that Beijing’s trade surplus with Washington widened to a record high in August, despite export growth cooling down. Last month, exports to the US climbed 13.4% to $44.4 billion, up from 13.3% in the previous month, and Chinese imports of US goods advanced 11.1% to $13.3 billion.

Exports to the United States in August rose 13.4 per cent to $44.4 billion, ticking up from July’s 13.3-per-cent growth. Chinese imports of US goods rose 11.1 per cent to $13.3 billion. China’s trade surplus with the United States widened to a record $31 billion.

The results could prompt President Trump to crank up the pressure on the world’s second-largest economy.

Investors fear that escalating trade tensions between both sides could lead to a dip in demand for the industrial metal. China is the world’s biggest consumer of copper, accounting for roughly half of the planet’s intake.

Copper did not gain assistance or get impacted by the US dollar as it was relatively flat on Tuesday. The greenback rose 0.03% to 95.18. A stronger buck is bad for dollar-pegged commodities because it makes it more expensive for foreign investors to purchase.

In other metals markets, December gold futures tacked on $2.80, or 0.23%, to $1,202.60 per ounce. December silver futures were unchanged at $14.18 an ounce. December platinum futures edged up $0.80, or 0.1%, to $790.80 per ounce. December palladium futures fell $2.70, or 0.28%, to $961.90 per ounce.

If you have any questions and comments on the commodities today, use the form below to reply.

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