London copper slips as China says will retaliate vs US tariffs
MANILA: London copper drifted lower for a third session running on Tuesday as China vowed to respond to the latest U.S. tariffs on about $200 billion of Chinese goods, exacerbating the trade war between the world's two biggest economies.
In imposing the new tariffs, U.S. President Donald Trump warned that if China takes retaliatory action against U.S. farmers or industries, "we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports."
China's commerce ministry said the country has no choice but to retaliate against the fresh U.S. tariffs and hopes the United States would correct its behaviour.
"We know China can't go tit for tat as they don't have enough U.S. goods to tax," said Stephen Innes, head of Asia Pacific trading at OANDA brokerage.
"So, if there is a more heavy-handed approach such as flat-out import restriction or overtly weakening the yuan, it could certainly bring the big market bears out of hibernation," Innes said in a note to clients.
Three-month copper on the London Metal Exchange was down 0.2 percent at $5,932.50 a tonne by 0722 GMT, slipping from a session high of $5,984 shortly after China issued its response.
Ahead of China's statement, the most-traded November copper contract on the Shanghai Futures Exchange rose 1.1 percent to settle at 48,680 yuan ($7,097) a tonne.
* TRADE TALKS: China's foreign ministry said that talks on an equal footing are the only correct way to resolve trade issues with the United States.
* RARE EARTHS: The United States did not include rare earth elements, metals used in magnets, radars and consumer electronics, on its final list of tariffs on $200 billion of Chinese goods, underscoring its reliance on China for the strategic minerals.
* ZINC: Zinc outperformed other metals, rising 1.3 percent to $2,351 a tonne in London and climbing 2.4 percent to end at 21,045 yuan in Shanghai. LME aluminium gained 0.2 percent to $2,035 a tonne.
* RUSSIAN COPPER: A company owned by Russian billionaire Alisher Usmanov is in talks to raise $1.25 billion from Russian banks by the start of 2019 to build a massive mining and metallurgical plant at Russia's biggest untapped copper deposit.