LONDON (Reuters) – Donald Trump didn’t make it to LME Week, the annual jamboree of the global metals trading community. But the U.S. president was the hot topic at the myriad seminars, cocktail parties and private meetings across London this week.
The industrial metals traded on the London Metal Exchange (LME) have found themselves at the heart of the escalating trade tensions between the United States and China. Physical supply chains have been stressed by tariffs and, in the case of aluminum, by U.S. sanctions against Russian producer Rusal.
Futures prices have been rocked by waves of speculative selling since the first round of trade tariffs was announced in June. The tension between macro doom and micro strength in markets such as copper has become extreme.
Chile’s mining minister, Baldo Prokurica, summed up the views of many this week when he said: “Were it not for the trade war between the U.S. and China, we would have a much higher copper price.”
The trade war, however, cannot be wished away. Indeed, it shows every sign of intensifying in the short term. The big question for the metals industry coming out of this year’s LME Week is how to trade that war.