Copper hits lowest since January as U.S.-China dispute escalates

According to Mining News Pro - Prices were being dictated by a stronger dollar and worries over the U.S.-China dispute, said ING analyst Warren Patterson.

The dollar touched a two-year high on Thursday. A stronger dollar makes metals more expensive for buyers with other currencies. But Patterson said if a trade deal was agreed, solid fundamentals would help copper recover to around $6,900 at the end of the year.

TRADE WAR: The U.S. blacklisting of China`s Huawei has raised concerns that the trade conflict is morphing into a prolonged technology cold war.

British chip designer ARM halted relations with Huawei to comply with a U.S. blockade of the company, while the United States is considering similar sanctions on Chinese video surveillance firm Hikvision. China`s Commerce Ministry said the United States needs to correct its wrong actions if it wants to continue negotiations. The U.S. military meanwhile sent two Navy ships through the Taiwan Strait. MARKETS/OIL: World share prices fell and oil prices slumped.

U.S. ECONOMY: Sales of new U.S. single-family homes fell in April and manufacturing activity slowed to its lowest in nearly a decade in May, pointing to an economic slowdown. GERMANY: German business morale deteriorated more than expected in May, the Ifo institute said.

COPPER DEFICIT: The International Copper Study Group said this month the roughly 24 million tonne a year market would see shortfalls of 189,000 tonnes this year and 250,000 tonnes in 2020, potentially supporting prices. CHILE: Coldelco`s huge Chuquicamata copper mine in Chile is set for a 40% drop in production over the next two years, an internal forecast shows. ZAMBIA: Zambia`s 2019 copper output could be as much as 100,000 tonnes lower than last year, the Chamber of Mines said. COPPER SCRAP: China`s imports of copper scrap rose 70% from March to 170,000 tonnes in April while alumina imports doubled to 60,000 tonnes, customs data showed.

OTHER METALS: LME aluminium closed up 1% at $1,797.50 a tonne, zinc fell 0.9% to $2,520, lead rose 0.4% to $1,808 and tin finished unchanged at $19,325. Nickel was not included in closing rings but was down 0.8% at $11,890 in electronic trading.