(MB) Base metals prices on the Shanghai Futures Exchange fell sharply during Asian morning trading on Wednesday July 11, with China-US trade tensions once again weighing on the market. Base metals prices were down across the board following the overnight release of a list of an additional $200 billion in Chinese goods on which the United States is considering imposing 10% tariffs. The tariffs will not go into effect immediately, but will undergo a two-month review process, with hearings on August 20-23. The announcement of further tariffs reignited fears that a widening trade war between the world’s two largest economies could bring about a slowdown in global economic growth.

Zinc led the SHFE base metals complex lower, with the metal’s most-traded September contract declining to 20,630 yuan ($3,113) per tonne as at 10.20am Shanghai time, down by 4.6% or 985 yuan per tonne from Tuesday’s close.

Weakness on the London Metal Exchange on Tuesday has filtered through to Asia this morning, which has also impacted sentiment toward SHFE zinc, a Shanghai-based analyst told Metal Bulletin.

The LME’s three-month zinc price ended trading on Tuesday down by 2.8% or $75 per tonne at $2,630 per tonne, with the metal struggling against a tight fundamental backdrop.

LME zinc has fallen more than 17% in a month and is down nearly $1,000 per tonne from the 2018 high of $3,582 per tonne reached on February 15.

“We envisage a short-term recovery in the LME zinc price but the upside momentum is likely to be limited,” Metal Bulletin Research analyst Andy Farida said. “This is because both the macro and micro dynamics in the next few months remain hazy and fraught with uncertainty.”

Similar weakness was seen in the rest of the SHFE base metals in the early Asian session on Wednesday. Copper slumped nearly 3%, while nickel fell more than 2%.

Tin was the most resilient of the complex with a decline of 1.2%.