Copper prices slide as new U.S. tariffs add to trade fears

• U.S. President Donald Trump stunned markets with tariffs against the two South American nations Brazil and Argentina.
• The rising trade tensions were weighing on prices of industrial metals.

SINGAPORE: London copper prices slid on Tuesday, with most industrial metals losing steam, as new U.S. tariffs on Brazil and Argentina revived global trade worries.

U.S. President Donald Trump stunned markets with tariffs against the two South American nations Brazil and Argentina, while weak U.S. factory data overshadowed positive manufacturing figures from China.

The rising trade tensions were weighing on prices of industrial metals, ANZ said in a report.

COPPER: Three-month copper on the London Metal Exchange was down 0.5pc at $5,854 a tonne, as of 0712 GMT, and the most-traded copper contract on the Shanghai Futures Exchange gave up 0.3pc to 47,080 yuan ($6,688.55) a tonne.

MANUFACTURING: China's factory activity showed surprising signs of improvement in November, with growth picking up to a near three-year high, a private sector survey showed on Monday, reinforcing upbeat government data released over the weekend.

DEFLATIONARY RISKS: Analysts, however, remain concerned about deflationary risks in the sector, unconvinced that the worst is over yet for Chinese manufacturers. They say the sub-indexes of both surveys painted a picture of patchy recovery that will be difficult to sustain.

TRADE DEAL: Investors in commodity and financial markets are expecting a U.S.-China trade deal to help drive economic growth.

POSSIBILITY: A senior adviser to U.S. President Donald Trump said on Monday an agreement was still possible before the end of the year, adding that the first phase of the deal was being put to paper.

ALUMINIUM OUTPUT: Norsk Hydro, one of the world's biggest aluminium producers, plans to cut production by 20pc at its majority-owned Slovalco plant in Slovakia, citing a weakening market.

INVENTORIES: The weak aluminium market has led to rising inventories. On-warrant LME stocks, material not earmarked for delivery, reached 1,114,650 tonnes, the highest since Feb. 22, data showed.