Shanghai Copper slides as China-US trade tensions escalate

Shanghai copper tumbled on Monday amid an escalation of trade tension between China and the United States after President Donald Trump’s threat to sharply hike tariffs.

The U.S. president on Friday threatened to impose an additional 100% tariff on imports from China and new export controls on critical software in response to Beijing’s expansion of its rare earth export controls.

China on Sunday blamed the U.S. for the escalation, calling Trump’s response hypocritical. However, Beijing did not roll out further countermeasures ahead of a potential meeting between Trump and Chinese President Xi Jinping later this month in South Korea, which Trump threatened to cancel.

The most active copper contract on Shanghai Futures Exchange closed daytime trading down 1.77% to 85,000 yuan ($11,919.45) per metric ton.

The benchmark three-month copper on the London Metal Exchange gained 0.92% to trade at $10,615 a ton by 0708 GMT, after falling over 3% in the previous session.

Copper is correcting due to the short-term impact of Trump's tariff threat, but supply issues due to a series of mine disruptions will continue to support the red metal's price, analysts at Chinese broker GF Futures said.

Investors have been long copper after Freeport declared force majeure at its flagship Grasberg mine in Indonesia last month, sparking supply fears.

Among SHFE base metals, aluminium was down 0.9%, zinc dropped 0.52%, nickel tumbled 1.91%, tin slid 2.2%. Lead emerged as the sole gainer, nudging up 0.15%.

In LME metals, aluminium was up 0.31%, zinc gained 0.55%, nickel eased 0.36%, lead dropped 0.62%, and tin fell 1.21%.