Zinc, copper futures slump in China as US plans tariffs on extra US$200 billion of Chinese goods
Futures contracts of various base metals fall at least 1.2pc in Shanghai
Zinc and copper led the declines in commodity futures in Shanghai on concern about shrinking demand for the base metals after the Trump administration escalated the trade war by proposing to levy tariffs on an additional US$200 billion of Chinese goods.
Futures contracts ranging from zinc to copper and aluminium on the Shanghai Futures Exchange fell at least 1.2 per cent on Wednesday. The base metals on the London Metal Exchange also traded lower after the US said it was seeking public consultation on a 10 per cent duty on Chinese goods from clothing to television components and refrigerators. The consultation is due to end on August 30.
“The trade war will contain aggregate demand in the economy and the base metals will be hit through slower fixed-asset investments,” said Dai Ming, a fund manager at Hengsheng Asset Management in Shanghai. “We are at an all-out trade war.”
Zinc contracts slumped 5.7 per cent to 20,695 yuan per tonne in Shanghai, copper dropped 3.4 per cent to 48,120 yuan and aluminium slid 1.2 per cent to 14,010 yuan.
China’s benchmark Shanghai Composite Index tumbled 1.8 per cent at the close.