Zinc and copper prices dropped on Tuesday, along with other base metals, after U.S. President Donald Trump warned new tariffs on Chinese goods in the absence of a trade agreement with China.
Trump told FOX News Channel's "The Ingraham Angle" that he thinks there will be "a great deal" with China on trade, but warned that he has billions of dollars worth of new tariffs ready to go if a deal is not possible.
Bloomberg News reported on Monday that Washington was preparing to announce tariffs on an additional $257 billion of Chinese goods by early December if talks next month between Trump and his counterpart Xi Jinping fail.
Metals prices have been weighed down by tit-for-tat tariffs imposed by the world's top two economies this year amid concerns the trade row will hurt demand for these commodities.
"Falling inventories and rising premiums continue to indicate the fundamentals remain positive for ... metals,
" ANZ wrote in a note. "However, rumours of more U.S. tariffs on Chinese goods triggered a sell-off." Three-month zinc on the London Metal Exchange was down 0.8 percent at $2,600 a tonne by 0725 GMT and copper slipped 0.3 percent to $6,140.
* SHANGHAI METALS: On the Shanghai Futures Exchange, zinc slid 1.9 percent to settle at 21,800 yuan ($3,130) a tonne, aluminium dropped 0.7 percent to 14,085 yuan and copper eased 0.4 percent to 49,700 yuan.
* COPPER PREMIUMS: The premium for the cash over the three-month LME copper contract CMCU0-3 was last at $18.50 a tonne, having hit a three-year high of $47 a tonne on Friday in a sign of immediate market tightness.
* BHP: The world's biggest miner BHP Billiton has trimmed its expectations of global growth for next year and 2020 due to a "lose-lose" result from the U.S.-China trade conflict.
* CHINA ECONOMY: China's banking and insurance watchdog will soon release new rules to boost financing to small companies, and urge banks to step up support for firms facing temporary difficulties.
* CHINA MANUFACTURING: Growth in China's factory sector likely cooled further in October as domestic demand faltered and exporters felt a bigger sting from an intensifying trade war with the United States, a Reuters poll showed.
* EQUITIES: Asia shares crept higher as China made a fresh attempt to stabilise its stock markets, but the gains looked fragile amid fears of a sharp escalation in the U.S.-China trade war. The dollar held most of its overnight gains against a basket of major currencies.
- Reuters -