Industrial metals prices fell on Tuesday, as traders and investors sold risky assets amid escalating China-US tensions on news that a high profile US politician was expected to visit Taiwan, a self-ruled island claimed by Beijing.
US House of Representatives Speaker Nancy Pelosi was expected to arrive in Taiwan later in the day, as several Chinese warplanes flew close to the median line dividing the Taiwan Strait, sources said.
Three-month copper on the London Metal Exchange fell 1.3 percent to $7,718.50 a ton, and the most-traded September copper contract on the Shanghai Futures Exchange declined 2 percent to 59,460 yuan ($8,783.25) a ton.
“There’ll be some repercussions for Pelosi visiting Taiwan, so it’s risk-off now. Once the news of the action taken is announced, market will rally,” a trader said.
Metals prices have also been weighed down by weak consumption from top market China, and surveys showed weak factory activity across the United States, Europe and Asia in July, adding to fears of a recession and gloomy demand outlook.
LME tin dropped 2.6 percent to $24,250 a ton, lead fell 0.4 percent to $2,045 a ton, zinc eased 0.4 percent to $3,315 a ton, while aluminum dipped 0.3 percent to $2,424 a ton.
ShFE aluminum shed 2.4 percent to 17,965 yuan a ton, nickel decreased 2.3 percent to 175,120 yuan a ton, tin dropped 3.9 percent to 191,860 yuan a ton, and zinc declined 1.1 percent to 23,865 yuan a ton.
Meanwhile in Indonesia, authorities planned to impose export tax on nickel pig iron and ferronickel in the third quarter of 2022 to boost exports revenue and domestic output of higher-value products, a senior official told Reuters on Monday.
