Most London base metals fell on Wednesday as trade tensions between the United States and China resurfaced, raising concerns over growth and future demand from top metals consumer China.
US President Donald Trump had on Tuesday made fresh warnings that he would revert to more tariffs if the two sides cannot resolve their differences, while China on Wednesday expressed confidence that it can reach a trade deal.
The remarks follow a period of relative quiet from Beijing after Trump and Chinese leader Xi Jinping reached a temporary truce in their trade war at a meeting over dinner in Argentina on Saturday.
“Even though China has not given much details but at least the comments show China will honour what they have agreed and will try to reach some deals,” said analyst Helen Lau of Argonaut Securities.
“This cautious view by the market is really overdone. I do not expect to see a big crash as it happened last night,” Lau said.
Three-month copper on the London Metal Exchange fell 0.3 per cent to $6,189.5 a tonne by 0725 GMT, while the most-active contract on the Shanghai Futures Exchange lost 1.2 per cent to 49,350 yuan ($7,189.06) a tonne.
Both London and Shanghai zinc edged higher. Stockpiles in LME warehouses dropped to a near 11-year low at 111,750 tonnes on December 3, while Shanghai stockpiles were at its lowest since April 2007 at 26,779 tonnes by the end of last week.
BHP has received approval from the local Australian government to develop the Venus nickel mine that will feed its Nickel West battery chemicals business as it gears up to produce nickel sulphate to feed the burgeoning industry for electric vehicle batteries.
Top nickel producer Vale SA plans to invest $500 million in its struggling New Caledonia nickel mine on its own after previously vowing to find a partner for the venture, reflecting the Brazilian miner's new understanding of the importance of an expected surge in electric vehicle sales.
China's services sector grew at its quickest pace in five months in November thanks to an uptick in new orders, a private survey showed, although the outlook for businesses over the next year worsened for the third month.
The greenback edged up on Wednesday, putting further pressure on London metals which are traded in dollars, as the commodities became more expensive for countries using other currencies.