Tensions between the United States and China intensified over the past few days, after U.S. President Donald Trump vowed to impose a 10% tariff on $300 billion of Chinese imports from Sept. 1.

Adding to the woes, the U.S. Treasury Department announced late on Monday that it had determined for the first time since 1994 that China was manipulating its currency. The yuan broke past the symbolic 7-per-dollar level on Monday after China let the currency slide in response to the latest U.S. tariffs.

Jefferies said these developments, including the devaluation of the yuan and tightening measures in Chinese property markets, suggested that a cyclical recovery has now been pushed back further.

Any measures to tighten lending for the real estate sector could have a major impact, as Chinese property markets account for about 15% of global demand for metals, Jefferies analysts wrote.

"A slowdown in construction and a decline in Chinese manufacturing and exports due to trade wars would be significant negatives for metals' demand, even if fiscal/monetary stimulus leads to some recovery in the broader Chinese economy," the brokerage said in a note.

Jefferies cut its ratings on Rio Tinto Ltd, BHP Group Ltd, Fortescue Metals Group, Peabody Energy Corp and Arch Coal Inc to 'hold' from 'buy'.

The brokerage now prefers copper miners over iron ore and coal miners. It reduced its 2019 price forecast for iron ore fines (CFR China) by over 10% to $88 per tonne, while that of iron ore lump (CFR China) was cut to $106 per tonne.

(Reporting by Tanvi Mehta and Geetha Panchaksharam in Bengaluru; editing by Gopakumar Warrier)