Steel-linked metals zinc and nickel hit multi-month lows on Tuesday as demand worries escalated on Chinese steel price weakness and mounting U.S.-Sino trade tensions, while tin prices sank to two-year lows.
Steel rebar prices in China eased further after touching their lowest since June this week on faltering demand and near-record supply. Zinc is used to galvanise carbon steel while nickel is widely used in stainless steelmaking.
U.S. President Donald Trump told the Wall Street Journal he expects to raise tariffs on $200 billion of Chinese imports to 25 percent from 10 percent. He is due to meet Chinese President Xi Jinping on the sidelines of the G20 summit in Buenos Aires this week.
“At this stage macro sentiment is the most important factor. Investors really want to know what’s going on with the China-U.S. deal,” said ABN Amro analyst Casper Burgering. He added that poor macro sentiment was outweighing strong fundamentals in metals like zinc.
* PRICES: Three-month zinc on the London Metal Exchange hit its lowest since mid-September at $2,420.50 a tonne, and closed down 2.1 percent at $2,435 a tonne, while nickel ended down 0.9 percent at $10,775, having hit its lowest since last October at $10,720. Tin closed down 3.3 percent at $18,275, having hit its weakest since August 2016 at $18,215.
* TIN TECHNICALS: Tin broke through its 50-day moving average, worsening its technical outlook. For a column on tin click on
* TIN SURPLUS: The global tin market is expected to move into a surplus of 500 tonnes next year from a 7,500-tonne deficit in 2018, mainly due to weaker demand in China, the International Tin Association said last Friday.
* ZINC SPREADS: The premium of cash zinc to the three-month contract fell to $60 MZN0-3 from last week’s two-decade high of $97 but remains unusually high, suggesting a shortage of nearby supply.
* ZINC STOCKS: Zinc stocks in LME-registered warehouses have roughly halved to 121,275 tonnes since August, a 10-year low.
* DOLLAR: The U.S. dollar rose to its highest level in two weeks against its major rivals on U.S.-Sino trade tensions, making dollar-priced metals costlier for non-U.S. investors.
* ALUMINIUM: China Hongqiao Group, the world’s biggest aluminium producer, has been ordered to close up to 550,000 tonnes of annual smelting capacity this winter.
* METALS PRICES: Copper ended down 1.1 percent at $6,121.50 a tonne, having hit its lowest since mid-November, aluminium closed off 1.1 percent at $1,930.50, while lead finished 1.8 percent lower at $1,908.
