Copper prices fell on Tuesday, as traders and investors sold risky assets amid escalating China-US tensions.
US House of Representatives Speaker Nancy Pelosi landed in Taiwan on Tuesday evening in defiance of Chinese threats. She is the first US House leader to visit Taiwan since 1997. The visit is part of a broader trip to the Indo-Pacific — including Singapore, Malaysia, South Korea and Japan — focused on mutual security, economic partnership and democratic governance, Pelosi said in a press release.
“By traveling to Taiwan, we honor our commitment to democracy: reaffirming that the freedoms of Taiwan — and all democracies — must be respected,” Pelosi said on Twitter.
China views the island as its territory and had vowed an unspecified military response to Pelosi’s visit.
Copper fell 1.16% to $3.50 ($7,700) a tonne on the Comex market in New York during the Tuesday morning session.
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The most-traded September copper contract on the Shanghai Futures Exchange declined 2% to 59,460 yuan ($8,783.25) a tonne.
“There’ll be some repercussions for Pelosi visiting Taiwan, so it’s risk-off now. Once the news of the action taken is announced, the market will rally,” a trader said.
Metals prices have also been weighed down by weak consumption from China, and surveys showed weak factory activity across the United States, Europe, and Asia in July, adding to fears of a recession and gloomy demand outlook.
(With files from Reuters and Bloomberg)