BEIJING: Shanghai zinc futures fell more than 2 percent on Tuesday, their steepest drop in three months, tracking a decline in prices on the London Metal Exchange after LME warehouse inventories climbed.
The metal, used to galvanise steel, is also coming under pressure after President Donald Trump said the United States would impose a tariff of 25 percent on steel imports.
A number of countries, including China and Canada, have criticised the move, sparking talk of a trade war. Trump also vowed to impose a 10 percent duty on aluminium imports.
"Trade war fears continue to overhang the markets ... causing headwinds for LME metals," broker Sucden Financial said in a note on Tuesday.
FUNDAMENTALS
SHFE ZINC: The most-traded April zinc contract on the Shanghai Futures Exchange closed down 2.1 percent at 25,450 yuan ($4,011) a tonne, in its biggest daily drop since Dec. 6. It earlier touched 25,210 yuan a tonne, its lowest since Dec. 15.
LME ZINC: Three-month LME zinc was little changed at $3,292.50 a tonne at 0729 GMT, after hitting a 2018 low in the previous session. Stocks of zinc in LME warehouses jumped by 59 percent on Monday to 209,050 tonnes, and on-warrant stocks - those not earmarked for delivery - nearly doubled to 162,825 tonnes.
LME COPPER: London copper rose 0.5 percent to $6,945 on a weaker dollar. A softer greenback makes metals cheaper for holders of other currencies and can support prices
SHFE METALS: The most-traded April copper contract on the Shanghai Futures Exchange edged up 0.6 percent to 52,420 yuan a tonne, while lead shed 1 percent.
TRUMP TARIFF PLAN: Trump faced growing pressure from political and diplomatic allies as well as US companies urging him to pull back from proposed steel and aluminium tariffs, although he said he would stick to his guns.
INDONESIA: Indonesia's President Joko Widodo has instructed his administration to complete negotiations over the purchase of a majority stake in Freeport-McMoRan Inc's local unit by the end of April, a cabinet minister said on Monday.
COBALT: Australia's Celsius Resources, which has made Namibia's first cobalt discovery, is aiming to start production from the remote mine in 2020, the company's managing director said.
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