Trade war jitters push base metals lower

Copper fell to a three-month low on Thursday, easing along with other metals on concerns that an escalation in the global trade war could hit economic growth and demand for industrial metals. Benchmark copper ended 1 percent lower at $6,623 per tonne, after touching the lowest since March 26 at $6,589.50.
In the latest in the spat between Washington and Beijing, US President Donald Trump and White House economic adviser Larry Kudlow outlined plans to clamp down on Chinese acquisitions of sensitive American technologies.
"There are fears that the measures that the US has taken could lead to a slow down of global GDP growth," said Quantitative Commodity Research consultant Peter Fertig, adding that this could impact demand for metals.
"The big risk factor is that there might be new tensions and new rounds of escalation as Mr Trump has already threatened further import duties if China retaliates. He believes that he can make policy like the Sopranos."
COPPER: China's top copper smelters on Thursday failed to set minimum treatment and refining charges for copper concentrate in the third quarter of 2018, two people with knowledge of the matter said.
COPPER COSTS: Citi analyst Max Layton estimates the marginal costs of copper production could reach $6,400 a tonne this year from $5,600 a tonne in 2017 due to higher power and fuel costs and currency fluctuations.
"Copper prices could be 'supported' in the low $6,000s, should a modest surplus develop on a trade war or China demand-led deterioration in global growth."
Marginal cost producers are typically at the high end of the cost curve.
China's top zinc smelters plan to cut zinc output by 10 percent after holding a meeting in Shaanxi province to address low prices and treatment charges, two sources briefed on the matter said on Thursday.
The US economy slowed more than previously estimated in the first quarter amid the weakest performance in consumer spending in nearly five years, but growth appears to have since regained momentum on the back of a robust labour market and tax cuts.
The premium of cash to three month zinc eased to $42.20, edging further away from October highs touched on Friday and easing concerns over looming supply tightness.
On-warrant zinc stocks in LME-registered warehouses fell by 15,175 tonnes to 222,650 tonnes, data showed on Thursday, after fresh cancellations in New Orleans. Total stocks inched 25 tonnes lower to 249,325 tonnes.
Benchmark zinc was the only metal to end in positive territory, up 0.7 percent at $2,874 per tonne. Aluminium was down 1 percent at $2,155 per tonne, lead slipped 1.5 percent to $2,397.50, tin inched 1.3 percent lower to $19,600, while nickel was down 0.6 percent at $14,785.