LONDON: Copper slumped to the weakest in more than two weeks on Friday, weighed down by worries about a trade war in retaliation to fresh U.S. tariffs, which could hit economic growth in top metals consumer China and the world.
Three-month copper on the London Metal Exchange (LME) was down 0.5% at $9,347.50 a metric ton by 1100 GMT, its weakest since February 12, and was set for a 2% weekly decline.
U.S. President Donald Trump on Thursday threatened to slap an extra duty of 10% on imports from China in addition to a tariff of 10% levied on February 4.
Trump also said his proposed 25% tariffs on Mexican and Canadian goods would take effect on Tuesday, disappointing some investors hoping for a delay.
“There’s not a huge amount of clarity, but the tariffs could be cumulative. And I think the working assumption is yes,” said Nitesh Shah, commodity strategist at WisdomTree.
“The aluminium and steel tariffs, are they on top of what’s already applied on Canada and Mexico? If so, you’re talking about 35% tariffs on aluminium, which is pretty punitive.”
US copper jumps as Trump moves on copper tariffs
“So I think a lot of metals are suffering as a result.”
Trump has imposed 25% tariffs on steel and aluminium, while Canada supplies the bulk of U.S. imports of the latter.
Concern about an escalating trade war sent a chill through wider financial markets, hitting stocks and sending the dollar to near multi-week highs.
A strong dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies.
Investors were also eyeing China’s National People’s Congress meeting scheduled for March 5.
“China is pretty much playing the same strategy for the last three years now. It’s very much piecemeal stimulus, nothing massively game-changing,” Shah said.
LME tin dropped 1% to $31,390 a ton after news emerged that Myanmar’s Wa State is considering allowing mining to resume in the tin-rich region. Myanmar is the world’s third-largest producer.
Among other metals, LME aluminium eased 0.4% to $2,621 a ton, zinc shed 0.7% to $2,790.50, nickel lost 1% to $15,680 and lead was down 0.3% at $2,001.
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