Off The Wire
METALS-Copper rebounds after U.S. slaps tariffs on Chinese goods
But with investors already braced for tariffs, copper was supported by the unexpected resilience of global share prices and non-U.S. currencies and expectations that stimulus in China, the largest metals consumer, will underpin demand. "It (the tariff decision) was baked in," said BMO Capital Markets analyst Kash Kamal.
"The negative effects of any tariffs and any falling demand in China (as a result) are being effectively countered by increased infrastructure spending," he said.
LME COPPER: Benchmark copper on the London Metal Exchange traded up 1.4 percent at $6,028 a tonne in official rings but was still close to a 14-month low of $5,733 touched last month.
TECHNICALS: Copper was struggling to rise above its recent downtrend line which comes in at around $6,040.
U.S. TARIFFS: U.S. President Donald Trump said he was imposing 10 percent tariffs on about $200 billion worth of imports from China, and threatened duties on about $267 billion more if China retaliated. CHINA RETALIATION: China's commerce ministry said the country has no choice but to retaliate and hoped Washington would correct its behaviour. RARE EARTHS: The tariffs did not include rare earth elements. GLOBAL MARKETS: Global share markets rose, with China's blue-chip CSI300 index adding 2 percent thanks to a rally in infrastructure stocks. DOLLAR: The dollar meanwhile hit its weakest since late July against a basket of major peers, supporting dollar-priced metals by making them cheaper for buyers with other currencies. China's yuan was steady against the greenback. PERU: MMG revised guidance for 2018 copper concentrate production at its Las Bambas mine in Peru to 375,000-395,000 tonnes from 410,000-430,000 tonnes. ZINC: LME zinc did not trade but was bid up 1.9 percent at $2,363 a tonne, rebounding from Monday's near 2-year low but butting up against its downtrend line at around $2,380.
DEFICIT: The global zinc market deficit deepened to 32,500 tonnes in July from 14,200 tonnes in June, data from the International Lead and Zinc Study Group (ILZSG) showed. SPREAD: The premium of three-month LME zinc over the cash contract touched $20.50, the highest since April last year. OTHER METALS: LME aluminium traded up 0.4 percent at $2,040 a tonne, nickel was bid 0.9 percent higher at $12,375, lead was bid down 1 percent to $2,052 and tin traded down 0.4 percent at $18,950. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Top Base and Precious Metals Analysis - GFMS ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Manolo Serapio Jr.; Editing by Adrian Croft and Jan Harvey)
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