LONDON: Copper prices hovered around a two-year low on Tuesday as further escalation in the US-China trade conflict delayed resolution to a dispute that has depressed economic growth and increased fears over metals demand.
Three-month copper on the London Metal Exchange (LME) inched up 0.1pc to $5,690 a tonne in official trading rings, failing to achieve any real distance from the $5,640 two-year low touched in the previous session.
China's central bank on Tuesday said Washington's decision to label Beijing as a currency manipulator would "severely damage international financial order and cause chaos in financial markets".
ING commodities analyst Warren Patterson said prices would continue to be dictated by macro events and that Tuesday's prices were "a bit of a correction" after the previous session's plunge.
The escalation in tensions could cause a further rift between the world's two largest economies and hurt global growth, including in China, the world's biggest metals consumer.
TRADE WAR: The US-China dispute has already spread beyond tariffs to areas such as technology, with analysts warning that tit-for-tat measures could widen in scope and severity, weighing further on business confidence and global economic growth.
CHINESE CURRENCY: The offshore yuan pulled back from a record low after Beijing appeared to take steps to prevent it from weakening further after the sharp drop that prompted the US government to accuse China of manipulating its currency.
A sharp weakening of the yuan has made metals more expensive for buyers in China.
CHINESE PREMIUMS: Yangshan copper premiums have climbed to their highest since mid-February at $66.50 a tonne, suggesting stronger physical demand in China, though ING said the demand outlook remained uncertain because of the trade conflict.
NICKEL INDONESIA: A top Indonesian mining ministry official said on Monday he would not speculate on whether the government might bring forward a planned ban on mineral ore exports from 2022.
This helped propel benchmark nickel prices to a two-week high on Monday. In official rings, the metal advanced 1pc to $15,030 per tonne.
ALUMINIUM SMELTERS: Production costs for aluminium smelters in China, the world's top maker of the metal, fell 4pc month-on-month to an average of 13,888 yuan ($1,974) a tonne in July as alumina prices slumped, Antaike said.
PRICES: Aluminium rose from a seven-week low touched on Monday, gaining 0.2pc to $1,766 a tonne while zinc firmed 0.6pc to $2,324.50 after touching an 11-month low in the previous session.
Lead traded 2.4pc higher at $2,001 and tin rose 0.9pc to $17,050.
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