LONDON: Copper prices hit their highest in more than three months in London on Friday as improved demand prospects in top metals consumer China and a weaker dollar helped to offset risks related to U.S. import tariff plans, for now.
Three-month copper on the London Metal Exchange rose 1.4% to $9,618.50 a metric ton by 1107 GMT after hitting its highest since November 8 at $9,648.
“All of the base metals are up today as there is a general rally across the complex with the risk-on environment. Part of it is that demand in China looks quite good, especially for copper, after it came back from (the Lunar New Year) holiday,” said Dan Smith, head of research at Amalgamated Metal Trading.
New bank loans in China surged more than expected to a record high in January as the central bank moved to shore up a patchy economic recovery, reinforcing expectations of more stimulus in the coming months.
A weaker U.S. currency is also making dollar-priced metals more attractive for buyers using other currencies and is helping the market to set aside the U.S. import tariff worries.
Trump on Thursday ordered commerce and economics officials to study reciprocal tariffs against countries that place tariffs on U.S. goods and to return their recommendations by April 1.
LME copper spread flips to premium for first time in 19 months on tariff worries
“The tariff risks are being looked through for now because, after all the rhetoric, it is actions that count really,” Smith said.
The LME copper contract is up 6% this month, also supported by a jump in U.S. Comex copper futures. The premium for U.S. futures over the LME contract reached a record high this week and remains above $1,000 a ton.
The spread between the LME cash contract and three-month contract <CMCU0-3> spiked to a premium on Friday.
LME aluminium gained 1.3% to $2,636.50 a ton. U.S. tariff concerns have helped to lift the U.S. Midwest aluminium premium by 39% this month and it remains at its highest since April 2022.
In other metals, zinc was up 1.3% at $2,883 a ton and tin added 1% to $32,265. Zinc hit its highest since January 22 while tin touched highest since November 5.
Lead edged up by 0.2% to $1,991.50 and nickel added 0.9% to $15,515.
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