Aussie resource prices plummet thanks to US trade war
COPPER prices slipped overnight as sentiment was dominated by the protracted US-China trade dispute and subsequent damage to global growth and demand, as well as a stronger US dollar.
Benchmark copper on the London Metal Exchange ended down 0.2 per cent at $US5,892 a tonne.
"The resolution, or otherwise, of the trade talks between the United States and China are of meaningful importance to base metals markets," said Guy Wolf, head of market analytics at Marex Spectron.
"Underlying physical markets are significantly more robust than the headlines would suggest they have any right to be. That is not to suggest things are booming, nor are they looking as tight as they perhaps were earlier in the year."
Traders said a break of the 21-day moving average at $US5,925 triggered stop levels, which earlier in the session took prices to a session high at $US5,946.50.
Reinforcing this was a drop in copper stocks in LME warehouses, which fell 4,675 tonnes to 298,300 tonnes.
Funds and dealers trading headline stocks had taken bets on lower prices after LME copper inventories last week rose above 300,000 tonnes from 239,925 tonnes.
The United States and China agreed late in June to restart trade talks after President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei.
The Trump administration has accused China of engaging in unfair trade practices that discriminate against US firms, forced technology transfers and intellectual property rights theft - all charges authorities in Beijing have denied.
Chinese industry accounts for about half of global consumption of industrial metals.
Markets are looking ahead to Chinese data on bank loans.
New bank loans in China are expected to have picked up to a five-month high in June, a Reuters poll suggested, as Beijing authorities kept ample liquidity in the financial system to support the slowing economy.
A higher US currency makes US-dollar-denominated metals more expensive for importers in other currencies, which potentially could subdue demand.
Prices of the metal used to galvanise steel have recently come under pressure from expectations of rising supply and the likelihood of a second half balanced market or surplus.
Zinc was down 1.2 per cent at $US2,378 a tonne, a six-month low.
Receding worries about zinc shortages on the LME market are also apparent in the discount for the cash over the three-month contract, which is about $US2.60 a tonne, against a premium of more than $US160 a tonne in late May.
Aluminium gained 0.3 per cent to $US1,809, lead gained 0.8 per cent to $US1,884, tin added 0.7 per cent to $US18,490 and nickel was up 1.9 per cent to $US12,720 a tonne.