The bitter trade war between China and the United States have caused some industrial metal prices to fall. The most recent to fall victim to this trade tension is copper which lost its ground on Tuesday. Trade forecasts reveal that copper is set to fall for three out of the possible four sessions.
In terms of stock market prices on the London Metal Exchange, copper had dropped by 0.6 percent and currently stands at $6,066.50 per ton. On the other hand, the most traded copper contract on the Shanghai Futures Exchange dropped by 0.4 percent to 48,540 Yuan per ton or around $7,061.39.
In recent years, copper prices have helped reflect the outward influence of China as the country is the world's biggest consumer of copper. Despite this, many market analysts are still skeptical as to what will be the effect of the current drop in copper prices to China's economy.
China is responsible for nearly half of the global copper consumption. Additionally, copper prices are almost at its peak in the last two years. This is due to the fact that some manufacturers have rushed buying refined metals in order to avoid the looming import tariffs.
It is a well-accepted wisdom that when copper prices drop, there is a brewing tension on the global economy. Copper is important to many vital industries, hence its effect on the global trade. Many trade experts have long stated that the price of copper can essentially predict future bust and booms of the market.
Further aggravating trade anxieties is the fact that the recent talks between China and the U.S. have yielded no major breakthrough in terms of curbing the trade war between the two countries. Some analysts fear that the two countries will resort into another round of tariffs as they try to outdo each other, further sinking the global economy.
The Chinese Commerce Ministry recently said that it has brought a complaint with the World Trade Organizations, to protest the latest round of tariffs imposed by the U.S against Chinese products.
On a lighter note, U.S. and Mexico recently agreed to make amends to the North American Free Trade Agreement (NAFTA). This puts Canada in a rather awkward position as the country needs to agree to new regulations that cover auto trade.
