A rout in commodities deepened as the threat of a trade war between the world’s two biggest economies intensified, hitting markets from steelmakers to soybeans.
As the tit-for-tat trade dispute between the U.S. and China stepped up, a Bloomberg gauge of commodities fell to the lowest since early April, with agriculture being the worst hit. . Almost all raw materials fell after President Donald Trump threatened tariffs on another $200 billion of Chinese goods.
A Bloomberg agriculture index fell to the lowest since at least 1991, while global mining stocks sank to the lowest in 18 months. Industrial metals fell, with copper, nickel and zinc all giving up more than 2 percent.
The spat is upending commodities markets that as recently as last month had climbed to an almost three-year high on signs of a strengthening global economy. China, the biggest raw-materials buyer and a key destination for some U.S. farm goods, vowed to retaliate “forcefully” against Trump’s threatened tariffs.
“The escalating trade dispute between the U.S. and China is putting noticeable pressure on grain and oilseed prices,” Commerzbank AG said in a note. “Sentiment among market participants is becoming noticeably gloomier, stock markets are falling, cyclical commodities such as base metals are under pressure.”
For the rest of this article: https://www.bloomberg.com/news/articles/2018-06-19/commodities-slide-as-u-s-china-spat-hits-soy-to-steelmakers