LONDON: Copper and other industrial metals prices fell on Thursday as the United States and China exchanged threats in their trade dispute and the yuan slumped to an 11-year low against the dollar.
Investors fear the trade war is undermining economic growth and metals usage. A weaker yuan, meanwhile, makes dollar-priced metals more expensive for Chinese buyers.
China is the world's top consumer of industrial metals, and higher prices there could damage demand.
Benchmark copper on the London Metal Exchange (LME) traded down 0.7% at $5,690 a tonne in official rings after touching $5,681, the lowest since Aug. 7.
The weaker yuan and fears over the health of the global economy were having a bigger impact than supply deficits which should be supportive for metals prices, said Commerzbank analyst Daniel Briesemann.
China was unlikely to quickly implement large-scale economic stimulus measures that would support demand, he added.
TRADE WAR: Beijing said on Thursday it would retaliate against new US tariffs on its goods, after President Donald Trump said he had to confront China over trade even if it caused short-term harm to the US economy.
Metals prices have fallen sharply since the trade war began last summer, with copper down more than 20% from a June 2018 peak.
FED: Minutes of last month's US Federal Reserve meeting showed policymakers were deeply divided over whether to cut interest rates, but united in wanting to signal they were not on a preset path to more rate cuts.
Interest rate cuts aimed at stimulating economic activity would be likely to support metals.
EUROPE: Euro zone business growth picked up a touch in August, helped by brisk services activity and as manufacturing contracted at a slower pace, but future expectations were their weakest in over six years, a survey showed.
CODELCO: Chile's Codelco, the world's top copper producer, said on Wednesday it had shut down its Ventanas smelter along Chile's central coast for maintenance. It said this would not impact production.
INDONESIA: Indonesia's nickel miners association said it would continue asking the government to stick to its 2022 timetable for a nickel ore export ban.
Concerns that Indonesia, a major exporter of nickel, will move forward implementation of the ban have sparked fears of supply constraints and helped prices to rally sharply.
ZINC/LEAD: The global zinc market swung into a small surplus in June, while the lead market flipped to deficit, data from the International Lead and Zinc Study Group (ILZSG) showed.
OTHER METALS: LME nickel traded down 0.8% at $15,700 a tonne, zinc fell 1.9% to $2,246, lead lost 0.9% to $2,065.50 and tin slipped 1.9% to $15,900. Aluminium did not trade but was bid down 0.7% at $1,766.