LONDON: London aluminium prices rose on Monday and copper traded on the US Comex exchange widened its premium against the London benchmark after US President Donald Trump said he would impose new 25% tariffs on all steel and aluminium imports.
Speaking to reporters on Air Force One on Sunday on his way to the NFL Super Bowl in New Orleans, Trump said he would announce the new metals tariffs on Monday. Three-month aluminium on the London Metal Exchange was up 0.3% at $2,635 a ton in official open-outcry trading. The contract touched a two-week high of $2,651 on Friday. The US is highly dependent on imported aluminium, mostly from Canada.
Prices of primary aluminium in the US are based on the LME benchmark plus the Midwest premium, which has been elevated in recent months and was last at $0.305 a lb, its highest since July 2022.
“Tariffs would result in higher aluminium prices in the US, representing a significant upside risk to the US Midwest premium this year, which would result in higher costs for consumers in the US,” said Ewa Manthey, a commodities analyst at ING. Trump said that in addition to Monday’s statement he will announce reciprocal tariffs on Tuesday or Wednesday to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each country. LME benchmark copper meanwhile was steady at $9,408 a ton in official activity, having hit its highest since November 8 at $9,530.
Most active US Comex copper futures gained 1.5% to $4.658 a lb, their highest since September 30, representing an unusually high premium over the LME price of $830 per ton. This premium was lower in late May 2024, when Comex copper prices hit an all-time high of $5.1985 a lb due to a short squeeze, where parties were forced to buy back their short positions at a loss or deliver physical copper to close them out.
CME copper stocks have been rising since the incident and are currently at a six-year high. LME zinc fell 0.3% to $2,832 per ton, lead lost 0.4% to $1,986, tin gained 0.2% to $31,175 and nickel lost 0.7% to $15,640.
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