LONDON: Copper extended declines on Wednesday, with Chinese prices touching an eight-month low, as buying from bargain hunters dried up after top metals consumer China retaliated against higher US tariffs, fuelling a trade war between the world’s two biggest economies.
Benchmark three-month copper on the London Metal Exchange (LME) fell 0.8% to $8,585 a metric ton in official open-outcry trading. LME copper has tumbled by 20% since touching its highest in more than nine months on March 26 at $10,164.50.
“There’s clearly been some dip buying from China, but I think the problem is that the prospect of a US recession is going up and up,” said Dan Smith, head of research at Amalgamated Metal Trading.
China will impose 84% tariffs on US goods from Thursday, up from the previously announced 34%, its finance ministry said on Wednesday, firing the latest salvo in a global trade war sparked by US President Donald Trump.
“I think everyone was hoping that Trump would blow back a bit in terms of his aggressive tariffs, but I think it’s going to take a while for this to shake out,” Smith said.
“It’s like a falling knife at the moment, so I wouldn’t want to be trying to buy the dips myself.” Goldman Sachs said on Wednesday that it expected copper prices to drop to a monthly average of $8,300 a ton in the third quarter of 2025.
The most traded copper contract on the Shanghai Futures Exchange (SHFE) lost 1.8% to 72,130 yuan ($9,814) a ton, hovering near its lowest since August 2024.
Industrial users who need physical copper in China have been on the market to take advantage of the weaker prices. The Yangshan copper premium, which reflects demand for copper imported into China, has more than doubled since late February to $87 a ton, its strongest since December 2023.
LME tin tumbled 10% to its weakest in nearly three months after major producer Alphamin Resources Corp said it was launching a phased resumption of operations in Congo. It dropped 9.4% in official activity to $29,550 a ton.
Among other metals, LME aluminium lost 1% to $2,326.50 a ton, nickel gave up 1.3% to $14,000, zinc shed 0.8% to $2,542 and lead fell 1.3% to $1,846.
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