Copper falls as Sino-US tensions rise

SINGAPORE: Copper prices fell on Thursday as rising tensions between the United States and China sparked concerns of further retaliation between the world's two biggest economies.

The most-traded September copper contract on the Shanghai Futures Exchange ended down 0.9pc at 51,970 yuan ($7,429.59) a tonne, while three-month copper on the London Metal Exchange rose 0.1pc to $6,493 a tonne by 0703 GMT, having fallen as much as 0.8pc earlier in the session.

The United States' move to shut the Chinese consulate in Houston, Texas on Wednesday prompted Beijing to consider closing the US consulate in the central city of Wuhan, a person with direct knowledge of the matter said.

"Copper is trading lower as sentiment is dampened across markets after the decision by the US to close the Chinese consulate in Houston, heightening tension between the two countries," said commodities broker Anna Stablum of Marex Spectron.

"The drop in copper might represent another buying opportunity as the concentrate market continues to tighten," Stablum said, noting low treatment charges and miners' struggle to keep up production as they postpone capital expenditure.

FUNDAMENTALS

OTHER METALS: LME aluminium rose 0.2pc to $1,693.50 a tonne, tin declined 0.2pc to $17,540 a tonne while ShFE nickel dropped 1.2pc to 106,040 yuan a tonne and ShFE lead decreased 1.4pc to 14,865 yuan a tonne.

NICKEL: Indonesian state miner PT Aneka Tambang's ferronickel production fell 0.6pc year-on-year in April-June but sales rose 14pc annually.

LEAD: Chinese lead domestic prices rose to a one-week high at 15,050 yuan a tonne on Wednesday, SMM data showed.

COPPER SPREAD: Premiums of LME cash over three-month copper rose to $17 a tonne, highest since March 2019, amid falling copper stocks and large holdings of warrants and cash contracts.