Home / Metals / Base Metals Bottoming Out Despite Trade War Concerns
Stainless Steel Flanges

Base Metals Bottoming Out Despite Trade War Concerns

The base metals index of the London Metal Exchange declined for seven days in a row to extend its rout to the fourth straight week. A key indicator, however, suggests a rebound.
The index comprising six primary metals declined 12.5 percent since Jun. 7 on the back of escalating trade war concerns between the U.S. and China. Among the six primary metals, zinc fell the most at 14.3 percent in a month, while aluminum, copper and nickel declined 10-13 percent each. Lead and tin fell nearly 8 percent during the period.
Relative Strength Indicator, a technical analysis tool measuring the momentum behind price moves, for base metals is in ‘oversold’ territory, indicating a possible upside. The current level of RSI has been breached only twice in the last five years and the LMEX Index rose 10-15 percent in each of those instances. As the dollar index falls, commodities could surprise on the upside, said Amit Harchekar, director of Mumbai-based Index Genius Investment Advisors.
Yet, the threat of a bigger tariff war looms. China is one of the biggest consumers of base metals and any slowdown there will hurt prices.
U.S. President Donald Trump indicated on Thursday that tariffs could be imposed on imports of over $500 billion. “The current tariffs are small and wouldn’t have much impact on China’s growth as per economists’ expectations,” said Geoff Lewis, senior Asia strategist, Capital Markets & Strategy Group, Manulife Asset Management (Asia), in an interview to BloombergQuint. “If (the tariffs) go up to $400 billion of China’s exports, then its GDP growth could see a cut of 1 percent.”
Source: Bloomberg
Yaang Pipe Industry Co., Limited (www.yaang.com)

About www.nctv.net

www.yaang.com provide a wide range of steel products as Steel pipe, Steel pipes and seamless pipes, Alloy pipes, Pipe fittings, Composite steel pipe used in the industry, construction etc.

Leave a Reply

Your email address will not be published. Required fields are marked *


Scroll To Top