Copper prices fell on Tuesday, weighed down by a stronger US dollar and US President-elect Donald Trump’s pledge to levy more tariffs on Chinese products.
Three-month copper on the London Metal Exchange (LME) was down 0.4% at $9,010.50 per metric ton by 0442 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange (SHFE) eased 0.1% to 73,900 yuan ($10,187.48) a ton.
On Monday, Trump pledged an additional 10% tariff on goods from China and a 25% tariff on all products from Mexico and Canada from his first day in office.
China accounts for around half of the world’s metals consumption and manufactures most of the world’s goods.
The proposed tariffs will likely hurt economic growth and disrupt trade flows, which could eventually lower the consumption of metals.
The plan pushed the dollar higher against major currencies, making greenback-priced metals more expensive to holders of other currencies.
A broker said the fall in metals prices was marginal because the market had already reacted to the tariffs plan after Trump won the White House on Nov. 5 and as some traders were expecting higher tariffs on China.
Copper bounces on bargain hunting and risk appetite
China’s peak demand season, which spans from November to December, has also prevented a further decline in copper prices, with SHFE inventories falling and import premiums rising to a one-month high of $53 a ton.
LME copper is also supported around the $9,000 price level, the broker said.
On Tuesday, LME aluminium fell 0.5% to $2,638 a ton, nickel eased 0.1% to $16,195, zinc rose 0.6% to $3,037.50, lead was down 0.6% at $2,017.50 and tin edged up 0.2% at $29,040.
SHFE aluminium rose 0.2% to 20,570 yuan a ton, nickel climbed 1.1% to 128,460 yuan, zinc climbed 1.8% to 25,250 yuan, lead advanced 0.3% to 17,220 yuan, while tin was nearly flat at 242,780 yuan.
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