On Monday, as the Sino-US trade war intensified, China responded with copper prices falling to a 15-week low. In afternoon trading, copper delivered in July hit $2.709 per pound ($5,972 per ton), down 2.4% from Friday’s closing price.
China will impose a 25% tariff on $60 billion in imports from the United States, including diamonds, rubies and emeralds, iron ore, nickel, zinc and titanium. Lithium is exempted and will continue to be subject to a 5% tariff.
Last Friday, the United States imposed tariffs on $200 billion worth of Chinese imports, with nearly 6,000 products currently subject to 25% tariffs, up from 10% before. The United States imports about $540 billion worth of goods from China every year, while China imports $120 billion worth of goods every year.
China imports nearly half of the world’s copper. Until trade disputes begin to affect the prospects of industrial metals, China’s economic growth has been slowing.
Automobile and Electronic Products
China has also imposed higher tariffs on a range of electronic products and household appliances, including television cameras, telecommunications equipment and microwave ovens.
In a report last week, Capital Economics pointed out that some metals are “more vulnerable than others to trade disruptions between the United States and China”. Given that electronics account for about 30% of U.S. imports from China, the price of metals (especially tin) widely used in the electronics industry seems particularly at risk, the research company said.
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With the exception of aluminium, prices of basic metals fell across the board on Monday, and lead prices fell to their lowest levels in nearly three years. Equally frustrating is the data showing that China’s car sales fell by nearly 14.6% in April from a year earlier, the 10th consecutive month of year-on-year decline.
Passenger car sales were hit harder, with sales of 1.54 million vehicles last month, down 16.6% year-on-year, the 11th consecutive month of decline. Domestic sales of battery-powered and hybrid vehicles were 91,000, down 17% from March, but up 28.4% from the same period in 2018.