LONDON: Copper prices dropped modestly on Tuesday after incoming US President Donald Trump provided details of proposed tariffs on top metals consumer China, which were lower than expected.
Three-month copper on the London Metal Exchange (LME) was down 0.1% at $9,040 per metric ton in official open-outcry trading, paring losses after touching an inter-day low of $8,958.
He has previously pledged to end China’s most-favored-nation trading status and slap tariffs on Chinese imports in excess of 60% - much higher than those imposed during his first term.
The most-traded January copper contract on the Shanghai Futures Exchange (SHFE) closed down 0.3% to 73,740 yuan ($10,162.48) a ton. China’s peak demand season, which spans November and 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. On wider markets, the dollar rallied while European shares fell in the aftermath of Trump’s announcement.
The dollar index pulled back from its gains and was slightly weaker in early afternoon European trading. A softer dollar makes commodities priced in the US currency less expensive for buyers using other currencies.
LME copper has shed 12% since hitting a four-month peak on Sept. 30. “Copper looks somewhat challenged, it’s trading near the low end of its recent range and the risk at this point is for some additional weakness,” Hansen said.
Zinc jumped 1.9% to $3,077 a ton in official activity after holders of LME inventories gave notice they wanted to remove over 50,000 tons of material, cutting the amount of available stocks by a fifth. Meanwhile, LME aluminium fell 1.2% to $2,620, nickel shed 0.5% to $16,125, lead was up 0.3% at $2,034 and tin dipped 0.1% to $28,950.
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