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Industry sources pointed out in Hong Kong this week that Sino-US trade disputes are the main cause of metal price shocks, and market participants are ready to face the situation of continuous drastic changes.
Changes in the Sino-US trade negotiations have hit global financial markets this week, with investors facing the prospect that the 10-month trade war between the two countries may escalate rather than end.
Senior U.S. trade officials said on Monday that some of China's key commitments in trade negotiations have retreated, prompting President Trump to threaten to raise tariffs on Chinese imports to the United States over the weekend. The new tariff is scheduled to take effect on Friday.
David Wilson, commodity strategist at Freepoint, Furuibo, said the resurgence of trade tensions had led to a more severe trading situation in the metal market.
"It's very dramatic. Obviously our problem now is that we don't know what Trump will say next on Twitter, which makes it extremely difficult to trade metals," Wilson said at the LME Asia Week event in Hong Kong.
At the LME Asia Week audience interaction survey, 57% of respondents said they expected trade tensions and political risks to be the top issues affecting the metal market this year.
Fu Xiao, head of global commodity market strategy at BOC, said that while China and the United States were trying to reach a trade agreement, the possibility of more twists and turns could not be ruled out, and such uncertainty could further disrupt the metal market.
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