LONDON: US copper prices surged on Wednesday after President Donald Trump moved closer to imposing tariffs on imports, while a power outage in top producer Chile also supported the wider market.
The most active May copper futures on the U.S. Comex exchange jumped 3.8% to $4.70 a lb, having touched a 8-1/2 month peak on February 13.
It outperformed three-month copper on the London Metal Exchange, which was up 1.2% at $9,511 a metric ton by 1030 GMT.
“The U.S. copper premium over London is reflecting the pain U.S. consumers of this important metal will have to endure should the tariffs be rolled out,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
The premium of Comex copper over the LME spiked to $854 per ton from $580 a day earlier, but down from a peak of $1,153 on Feb. 13.
Copper prices slip on tariff threat and Chinese inventories
Trump, who previously said he planned tariffs on copper, on Tuesday ordered a probe into duties on imports of the metal critical to electric vehicles, military hardware, the power grid and many consumer goods.
“The U.S. has no chance of beefing up their own production and refining capacity anytime soon, so this looks like another own goal. Not least considering most of the copper is imported from a relatively friendly nation like Chile,” Hansen said.
The underlying copper market fundamentals are relatively soft, with inventories rising, but a power outage in Chile was also providing support, he added.
A massive power outage across Chile plunged the country’s capital Santiago into darkness on Tuesday and knocked out electricity to major copper mines in the country’s north.
Among other metals, LME aluminium rose 0.6% to $2,653.50 a ton, zinc added 0.6% at $2,828.50, nickel gained 0.4% to $15,400, lead climbed 1.1% to $2,014, while tin was up 0.1% at $32,820.
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