LONDON: Copper prices rose on Monday as traders bought to ship to the United States, where President Donald Trump is threatening to impose tariffs on imports of the industrial metal.
Benchmark copper on the London Metal Exchange (LME) was up 1.6% at $10,017 a metric ton at about 1110 GMT after touching $10,042 in early trade. Last week it touched $10,046.50 for its highest since October 3.
On COMEX, meanwhile, copper prices jumped to a record high of $5.1845 per lb, about $11,430 a ton. Traders said that movement of copper from the LME system to the United States can be seen in inventories held by warehouses in the exchange’s network around the world. Copper stocks in LME warehouses have dropped by 18% to 221,775 tons over the past four weeks.
Cancelled warrants - metal earmarked for delivery - are at 50% of the total, suggesting a further 111,000 tons is due to leave LME warehouses. Last month Trump ordered an investigation into potential new tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods.
Trump’s tariffs are intended to encourage local production of metal, but permits can be difficult to obtain for these operations and smelter construction can take years. “The policy is intended to stimulate investment in the US industrial base – boosting local production and conversion capacity,” said Liberum analyst Tom Price. “Perhaps in several years, the industry may respond. For now though, it has no choice but to continue importing these metals – and somehow accept, or pass on, the trade’s new tariff cost.”
Traders said that a Bloomberg report saying commodity trader Mercuria was estimating that 500,000 tons of copper was heading to the United States was also driving up prices.
A weaker US currency, making making dollar-priced metals cheaper for buyers with other currencies, was also boosting base metal prices. Aluminium was up 0.3% at $2,630 a ton, zinc gained 1.6% to $2,974, lead jumped 2.2% to $2,061 and tin firmed by 0.3% to $34,600 while nickel added 0.7% to $16,165.
Comments
Comments are closed for this article.