The world’s largest copper producer, Chile, said it was concerned Wednesday as copper fell to a nine-month low ahead of the first shots of a US-China trade war this week.
“We are worried and we hope it’s a transitory effect,” Finance Minister Felipe Larrain told a news conference, attributing the 2.0 percent drop to US trade tariffs on goods from China and the prospect of Chinese retaliation.
“Unfortunately, what we have seen has a lot to do with the trade war, the fundamental reason is the prospect of a confrontation like this.”
Copper fell to $2.929 a pound, its lowest price since October last year when it dropped to $2.927.
The US is due on Friday to begin enforcing tariffs on more than $30 billion (25.8 billion euros) in Chinese imports as retribution for what Washington describes as Beijing’s theft of US technology and other unfair trade practices.
Beijing has vowed to respond with its own tariffs immediately.
Chilean officials believe a trade war would hit GDP in China, the world’s largest consumer of copper.
“For the government and for the policies promoted by the current administration, it is imperative that copper be located above $3.0 per pound, as had been projected three months ago,” said Minister for Mining Baldo Prokurica.
Copper recovered in 2017 from a four-year slump in which prices hovered above $2.0 a pound due to a fall in Chinese demand. The slump dealt a blow to growth in Chile, which responsible for almost a third of global production.