July 11, 2018 / 3:46 AM / 2 years ago

METALS-Metals sink on fresh U.S. tariff threat; copper, zinc at 1-yr low

 (Updates prices)
    By Manolo Serapio Jr
    MANILA, July 11 (Reuters) - Copper, zinc and lead prices
slumped to their weakest in about a year and other metals also
sank in a broad selloff on Wednesday after the United States
raised the stakes in a trade war with China with threats of more
    The Trump administration said it would slap 10 percent
tariffs on another $200 billion worth of Chinese imports,
raising fears the festering trade dispute between the world's
two biggest economies could hit global growth.
    "There certainly is going to be pronounced risks mainly
because we've now moved on to the tit-for-tat-for-tit phase of
it," said Vishnu Varathan, head of economics and strategy at
Mizuho Bank in Singapore. 
    Last week, Washington imposed 25 percent tariffs on $34
billion of Chinese imports and Beijing responded immediately
with matching tariffs on the same amount of U.S. exports to
    "This is going to drag on until they can all come to the
table and agree to even the playing field. But the
unpredictability of the situation continues to rattle the
markets," said Varathan.
    Metals fell the most among commodities, with nickel, tin and
aluminium dropping to multi-month lows.
    Three-month copper on the London Metal Exchange
dropped as much as 4 percent to $6,081 a tonne, its lowest since
July last year. It was down 3 percent at $6,141.50 by 0710 GMT.
    On the Shanghai Futures Exchange, the most-traded copper 
 fell as much as 47,520 yuan ($7,135) a tonne, its
weakest since June last year, before closing at 48,120 yuan,
down 3.4 percent. 
    Zinc dropped by its 6 percent downside limit in Shanghai
 to 20,620 yuan per tonne, the lowest since June last
year. It fell as much as 4.8 percent to $2,503 in London
, the lowest since June 2017.
    LME lead slid by up to 4 percent to $2,220 a tonne,
the lowest since July last year.
    * U.S. TARIFFS: U.S. officials released a list on Tuesday of
thousands of Chinese imports the Trump administration wants to
hit with the tariffs, including hundreds of food products as
well as tobacco, chemicals, coal, steel and aluminium.
    * CHINA RESPONSE: China's assistant commerce minister said
on Wednesday that the latest proposed tariffs from the United
States harms the World Trade Organization system and hurts
    * MARKETS: China's shares tumbled and the dollar rose to
near an 11-month high against the yuan while the Australian
dollar dropped along with other Asian equities.
    * OTHER METALS: Other metals also slid to multi-month lows,
with LME nickel down 3.3 percent and aluminium
down 1.5 percent. In Shanghai, nickel closed 2.6
percent lower and lead fell 2 percent.
 BASE METALS PRICES                              0710 GMT
 Three month LME copper                            6141.5
 Most active ShFE copper                            48120
 Three month LME aluminium                           2056
 Most active ShFE aluminium                         14010
 Three month LME zinc                              2511.5
 Most active ShFE zinc                              20695
 Three month LME lead                                2227
 Most active ShFE lead                              19035
 Three month LME nickel                             13720
 Most active ShFE nickel                           109350
 Three month LME tin                                19420
 Most active ShFE tin                              142580
 BASE METALS ARBITRAGE                                   
 LME/SHFE COPPER                 LMESHFCUc3        368.99
 LME/SHFE ALUMINIUM              LMESHFALc3      -1951.51
 LME/SHFE ZINC                   LMESHFZNc3        549.81
 LME/SHFE LEAD                   LMESHFPBc3        268.82
 LME/SHFE NICKEL                 LMESHFNIc3        870.73
 ($1 = 6.6599 Chinese yuan)

 (Reporting by Manolo Serapio Jr.; Editing by Vyas Mohan)
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