Copper prices headed for their fifth consecutive weekly decline on Friday as the United States and China intensified their confrontation over trade.
Investors fear the trade dispute will damage economic growth and reduce the amount of metal the world consumes. Industrial metals prices are down sharply from last summer when the confrontation began.
Benchmark copper on the London Metal Exchange (LME) was down 0.8% at $6,049 a tonne at 1015 GMT.
The metal used in power and construction has lost 1.3% this week to trade close to its lowest since January.
Harsher trade rhetoric from Washington and Beijing was pushing prices lower, said Societe Generale analyst Robin Bhar, but he added that copper’s solid fundamentals meant prices were likely to recover to around $6,500 by the end of the year.
TRADE WAR: The trade war with the United States will only make China stronger and never bring the country to its knees, the ruling Communist Party’s People’s Daily wrote in a front-page commentary that evoked the patriotic spirit of past wars. The commentary came after both countries increased tariffs on each other’s goods and the United States blocked China’s Huawei Technologies from buying vital American technology.
GLOBAL MARKETS/DOLLAR: World stock markets fell and the dollar strengthened to near two-year highs against a basket of major currencies, making metals more expensive for non-U.S. buyers.
YUAN: China’s yuan has slumped 3.5 percent against the dollar since mid-April. China is the world’s largest consumer of metals.
CHINA PREMIUMS: Chinese import premiums at $47 are down from $120 in October and the lowest in two years. ALUMINIUM: 44,950 tonnes of cancellations pushed on-warrant stocks of aluminium in LME-registered warehouses to 757,725 tonnes. On-warrant stocks have fallen from more than 4 million tonnes in 2011 but are up from lows of just over 600,000 tonnes in October. Benchmark LME aluminium was down 1.1% at $1,840.50 a tonne.
NICKEL: Cash nickel on the LME flipped to a $21 premium against the three-month contract from a discount of around $80 at the start of the month. The premium is the highest since 2011 and points to a tightening of nearby supply. Headline stocks of nickel in LME-registered warehouses meanwhile slipped to 164,400 tonnes, the lowest since March 2013. LME nickel was down 1.2% at $12,035 a tonne.
ZINC SPREAD: The premium of cash zinc over the three-month contract rose to $151, the highest in more than 20 years. Zinc prices were down 0.9% at $2,613.50 a tonne.
OTHER METALS: Lead was down 0.8% at $1,822 a tonne and tin was little changed at $19,475 a tonne.