Steel-linked metals zinc and nickel have hit multi-month lows as demand worries escalated on Chinese steel price weakness and mounting US-Sino trade tensions, while tin prices sank to two-year lows.
Steel rebar prices in China eased further after touching their lowest since June this week on faltering demand and near-record supply.
Zinc is used to galvanise carbon steel while nickel is widely used in stainless steelmaking.
US President Donald Trump told the Wall Street Journal he expects to raise tariffs on $US200 billion of Chinese imports to 25 per cent from 10 per cent.
He is due to meet Chinese President Xi Jinping on the sidelines of the G20 summit in Buenos Aires this week.
‘At this stage macro sentiment is the most important factor. Investors really want to know what’s going on with the China-US deal,’ said ABN Amro analyst Casper Burgering.
He added that poor macro sentiment was outweighing strong fundamentals in metals like zinc.
Three-month zinc on the London Metal Exchange hit its lowest since mid-September at $US2,420.50 a tonne, and closed down 2.1 per cent at $US2,435 a tonne, while nickel ended down 0.9 per cent at $US10,775, having hit its lowest since last October at $US10,720.
Tin closed down 3.3 per cent at $US18,275, having hit its weakest since August 2016 at $US18,215.
Tin broke through its 50-day moving average, worsening its technical outlook.
The global tin market is expected to move into a surplus of 500 tonnes next year from a 7,500-tonne deficit in 2018, mainly due to weaker demand in China, the International Tin Association said last Friday.
The premium of cash zinc to the three-month contract fell to $US60 from last week’s two-decade high of $US97 but remains unusually high, suggesting a shortage of nearby supply.
Zinc stocks in LME-registered warehouses have roughly halved to 121,275 tonnes since August, a 10-year low.
The US dollar rose to its highest level in two weeks against its major rivals on US-Sino trade tensions, making dollar-priced metals costlier for non-US investors.
China Hongqiao Group, the world’s biggest aluminium producer, has been ordered to close up to 550,000 tonnes of annual smelting capacity this winter.
Copper ended down 1.1 per cent at $US6,121.50 a tonne, having hit its lowest since mid-November, aluminium closed off 1.1 per cent at $US1,930.50, while lead finished 1.8 per cent lower at $US1,908.