LONDON: Copper prices fell on Tuesday as traders awaited the outcome of US trade talks with Chile and China for more clarity on a US plan to impose a 50% import tariff on the metal from August 1.
The three-month copper contract on the London Metal Exchange was down 0.1% at $9,782 a metric ton in official open-outcry trading. “With the August 1 date looming, there remains market uncertainty around what forms of copper will be covered, and if there will be any carve-outs for key suppliers such as Chile, which would blunt the impact,” said Standard Chartered analyst Sudakshina Unnikrishnan.
The premium on the most active COMEX copper futures over the LME benchmark fell to 27% from last week’s 30% after leading global supplier Chile said that the US copper tariffs would be discussed within broader trade talks in Washington this week.
Providing another layer of uncertainty, US and Chinese officials began a second day of talks in Stockholm on Tuesday to resolve economic disputes and step back from an escalating trade war between the world’s two biggest economies. China is the world’s largest metals consumer.
The European Union and the US will develop a metals alliance to reduce the impact of subsidised Chinese production on global markets as part of their trade deal, European Trade Commissioner Maros Sefcovic said on Monday.
Sefcovic said the system has yet to be finalised but EU steel and aluminium makers would be granted a quota system with minimal or zero tariffs to replace US President Donald Trump’s 50% import tariffs. Among other LME metals, aluminium and zinc slid 0.9% to $2,607 and $2,793 a ton respectively in official activity.
Lead eased by 0.3% to $2,011, tin rose 0.1% to $33,745 and nickel was down 0.8% at $15,140.
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