It’s starting to get real ugly in Chinese bulk commodity and steel futures on Tuesday.
Just look at the scoreboard with around 90 minutes left to trade.
SHFE Rebar ¥3,751 , -3.37%
DCE Iron Ore ¥447.00 , -5.30%
DCE Coking Coal ¥1,201.00 , -3.84%
DCE Coke ¥2,081.50 , -4.28%
They were shut on Monday because of a public holiday in China. It’s likely that many investors holding long positions wish it remained that way.
The losses, like those seen across most markets across the region, reflect increased concern that trade tensions between the United States and China could erupt into a full-blown trade war.
On Monday, US President Donald Trump directed the US Trade Representative’s office to draw up a list of $US200 billion worth of Chinese goods to subject to new 10% tariffs, coming on top of prior tariffs announced just three days ago.
“Today I directed the United States Trade Representative to identify $US200 billion worth of Chinese goods for additional tariffs at a rate of 10%,” Trump said in a statement. “After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced.”
Only three days ago, the US government announced $US50 billion worth of Chinese imports that will be subject to 25% tariffs.
In response to the US move, China announced retaliatory tariffs on $US50 billion worth of US goods.
Along with trade tensions, the unusually large losses in futures could also reflect forced selling by some investors, particularly among those who bought in late last week following strong gains over recent months.
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