Commodity prices fall as the trade war between China and the United States grows

Commodity prices fell on Wednesday as trade tensions between the world's two largest economies rose one notch, hitting the stock prices of major mining companies and oil producers.

Zinc copper metals collapsed after Donald Trump pulled the start on a process that could see tariffs on an additional $ 200 billion of imports from China. Crude oil was also under pressure after the producer of Opep, Libya, announced the reopening of major export terminals.

Following President Trump's election victory in November 2016, commodities rallied as investors rose to the level of their pro-business agenda and planned an extensive program to boost their investment. infrastructure. Today, they fear that its trade rebalancing campaign will put a brake on global growth, although some badysts believe the sell has been exaggerated.

"We see the announcement by the White House of an additional $ 200 billion turn," said Bart Melek, head of commodities strategy at TD Securities.

China is the biggest consumer of almost all metals, many of which are turned into products for export.In addition to trade tensions, investors are also concerned about slowing growth in China as the government seeks to curb ready and spreading a credit bubble slowly.

Copper, a metal widely used in home appliances such as refrigerators that could be hit by the latest tariffs, dropped 3 percent to $ 6137 a tonne on the London Metal Exchange, reaching its lowest level in a year.

Nickel, a metal used in stainless steel batteries and electric car, fell by 3% to 13 $ 570, while zinc, used to make stainless steel, dropped 6% to $ 2,500 a tonne. at its lowest level since June 2017.

This reflected the impact of the mbadive sale of zinc in China. Traders have said that the holder of the huge bet on the Shanghai Futures Exchange was shorting zinc in order to offset some of its losses.

The liquidation of the commodities market also weighed on mining stocks. Glencore, a major producer of copper, zinc and nickel, lost 3.5% to 315p, while Anglo American lost 3.6% to 1660p and Rio Tinto 3.1% to 4,014. 19659002] Colin Hamilton, Analyst at BMO Capital Markets, said metal sales were exaggerated, given that the global economy was still likely to grow in the second half of this year.

"We would now badert that base metals are practicing a fast deceleration growth in the second half of the year, and while we are nervous about the emerging markets ex-China, in the world. together, we are still expecting positive demand growth, if at a lower rate, "Hamilton said.

But Mark Hansen, chief executive of Concord Resources, a London-based commodity trader, said it was unlikely that commodity prices would recover quickly. "I think we have seen the peaks of the year," he said.

Oil prices also fell, with crude oil falling 2.5% to less than $ 77 a barrel after Libya's internationally recognized public oil company reopened four key export terminals, which have been rendered by rival factions. Separately, Opep said Wednesday that Saudi Arabia had increased its output by more than 400,000 barrels a day in June as it was trying to curb rising prices and replace production with members of the group struggling against the crisis.