Copper and different industrial metals costs fell on Thursday as the U.S. and China exchanged warnings of their trade row, and the yuan slumped to an 11-year low against the dollar.
Investors worry the trade war is undermining economic progress and metals utilization. A weaker yuan, in the meantime, makes dollar-priced metals dearer for Chinese consumers.
China is the world’s prime client of industrial metals, and higher costs might damage demand.
Benchmark copper on the LME-London Metal Exchange was down to 0.8% at $5,685.50 a tonne at 1023 GMT after reaching $5,681, the lowest since Aug. 7.
The weak yuan and fears over the health of the worldwide economy had a more significant impact than provide deficits which must be supportive for metals costs, said Commerzbank analyst Daniel Briesemann.
China was unlikely to implement giant-scale financial stimulus measures that might support demand quickly, he added.
Beijing mentioned on Thursday it will retaliate against new U.S. tariffs on its goods after President Donald Trump suggested he needed to confront China over trade even when it caused brief-term hurt to the U.S. economy as a result of China had been dishonest Washington for decades.
Metals costs have fallen sharply since the trade war began last summer, with copper down more than 20% from a June 2018 peak.
Minutes of final month’s U.S. Federal Reserve assembly confirmed policymakers had been deeply divided over whether to chop interest rates, however, have been united in wanting to indicate they were not on a present road to more rate cuts.
Interest rate cuts aimed at spurring economic activity could be likely to support metals.