London copper prices slid on Tuesday, with most industrial metals coming under pressure, as manufacturing data from China failed to assuage lingering doubts of an economic slowdown.
There was additional pressure on metals and across the financial markets after U.S. President Donald Trump stunned markets with tariffs against Brazil and Argentina, recharging fears about global trade tensions. “The metal markets were also rattled by Trump’s move to reinstate tariffs on steel and aluminium from Argentina and Brazil, due to a massive devaluation of their currencies,” ANZ said in a research note.
COPPER: Three-month copper on the London Metal Exchange was down 0.3% at $5,866 a tonne, as of 0335 GMT, and the most-traded copper contract on the Shanghai Futures Exchange gave up 0.3% to 47,090 yuan ($6,689.97) a tonne.
MANUFACTURING: China’s factory activity showed surprising signs of improvement in November, with growth picking up to a near three-year high, a private sector survey showed on Monday, reinforcing upbeat government data released over the weekend.
DEFLATIONARY RISKS: Analysts, however, remain concerned about deflationary risks in the sector, unconvinced that the worst is over yet for Chinese manufacturers. They say the sub-indexes of both surveys painted a picture of patchy recovery that will be difficult to sustain.
TRADE DEAL: Investors in commodity and financial markets are expecting a U.S.-China trade deal to help drive economic growth.
POSSIBILITY: A senior adviser to U.S. President Donald Trump said on Monday an agreement was still possible before the end of the year, adding that the first phase of the deal was being put to paper.
ALUMINIUM OUTPUT: Norsk Hydro, one of the world’s biggest aluminium producers, plans to cut production by 20% at its majority-owned Slovalco plant in Slovakia, citing a weakening market. nL8N28C1YO
INVENTORIES: The weak aluminium market has led to rising inventories. On-warrant LME stocks MALSTX-TOTAL, material not earmarked for delivery, reached 1,114,650 tonnes, the highest since Feb. 22, data showed.
FUTURES CONTRACT: China’s Shanghai International Energy Exchange (INE) is preparing to launch a copper futures contract within the next year that will be open to domestic and foreign investors, according to two sources familiar with the plans.