By Naveen Thukral
SINGAPORE, Aug 23 (Reuters) - Copper prices slid 1.6 percent on Thursday, falling for a second session as a trade dispute between Washington and Beijing deepened, triggering concerns about demand for industrial metals.
The United States and China escalated their acrimonious trade war on Thursday, implementing punitive 25 percent tariffs on $16 billion worth of each other’s goods, even as mid-level officials from both sides resumed talks in Washington.
PRICES: Three-month copper on the London Metal Exchange lost 1.6 percent to $5,909 a tonne by 0712 GMT and the most-traded copper contract on the Shanghai Futures Exchange closed down 1.2 percent at 47,990 yuan ($6,981.38) a tonne.
TALKS: U.S. and Chinese officials met for the first time in more than two months to try find a way out of their deepening trade conflict.
“These are low-level official talks, based on the agenda that people are familiar with, we don’t expect substantial conclusion,” said Argonaut Securities analyst Helen Lau. “Trade tensions are continuing to drag on prices.”
CHINA: China accounts for nearly half of global copper consumption estimated at 24 million tonnes. The United States accounts for about 8 percent.
INFRASTRUCTURE: China almost quadrupled the value of fixed-asset investment projects approved in July from the previous month as Beijing looked to accelerate infrastructure spending to stabilise the cooling economy.
STIMULUS: China’s central bank said it will not resort to strong stimulus to support the slowing economy, but will keep liquidity reasonably ample and offer more help to companies that are having trouble obtaining financing.
PHYSICAL: However, China’s copper producers and traders are riding an unexpected surge of business that has pushed physical prices to their highest in nearly two years as fabricators rush to buy refined metal to avoid import tariffs on scrap that kick in on Thursday.
STOCKS: Cancelled warrants - material earmarked for delivery - for copper in LME-approved warehouses - have risen above 67,000 tonnes, from around 25,000 tonnes last week. The latest number is about 25 percent of LME copper stocks. MCUSTX-TOTAL
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
ARBS ($1 = 6.8740 Chinese yuan renminbi)
Reporting by Naveen Thukral; Editing by Sunil Nair