LONDON: Copper prices rose as the dollar eased on Monday, but gains were capped by uncertainty over the demand outlook in top consumer China and the prospect of U.S. President-elect Donald Trump imposing tariffs on imports.
Tariffs have the potential to start a global trade war and hit economic growth and demand.
Benchmark copper on the London Metal Exchange (LME) was up 0.9% at $8,953 a metric ton by 1116 GMT. Nervousness about the outlook has kept copper in a narrow range around $9,000 since the U.S. election in November.
“There isn’t a strong directional view in the copper market. The price is being driven by macro factors,” said Robert Edwards, analyst at consultancy group CRU, adding that the dollar was one of those factors.
“Until anything firm or concrete happens (on U.S. import tariffs), it’s difficult to make a judgment on how the market will progress.”
A weaker U.S. currency makes dollar-priced metals cheaper for holders of other currencies, which would be positive for demand.
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Markets are also looking ahead to the monthly U.S. employment report on Friday to gauge when the Federal Reserve might cut interest rates next and by how much.
The copper market is also focused on tight supplies of concentrate, partly because of operational issues and disruptions.
“Refined copper output outpaced mine supply in 2023 and 2024 as smelters fed more scrap into the mix and opted to keep running even as margins deteriorated,” Morgan Stanley analysts said in a note.
“This may get more challenging to deliver in 2025, as latent scrap in the system is used up, and copper prices are also down significantly from 2024’s all-time high.”
Global mined copper supplies are estimated at about 24 million tons this year. Copper hit a record high of $11,104.50 last year.
In other metals, aluminium slipped 0.2% to $2,489 a ton, zinc added 0.1% to $2,891, lead was up 0.8% at $1,938 while tin advanced 0.9% to $29,375 and nickel retreated 0.2% to $15,080.
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