LONDON: Copper prices rose on Tuesday as the dollar eased but weighing on sentiment was the prospect of slowing global growth and demand due to U.S. import tariffs and a trade war between China and the United States.
Benchmark copper on the London Metal Exchange (LME) was up 0.7% at $9,436 a metric ton at 1053 GMT.
“We are neutral now and bearish second half of the year on seasonality and policy shifts,” said Panmure Liberum analyst Tom Price. “This year is ultimately going to be hurt by tariffs once they start to have full impact on trade flows.”
Focus is on whether trade tensions will ease after China said last week it was evaluating an offer to hold talks over U.S. President Donald Trump’s 145% tariffs.
China’s Commerce Ministry said that Beijing’s door was open for discussions, signalling a potential de-escalation in the trade war. China is a top consumer of industrial metals such as copper used in the power and construction industries.
One positive, traders said, was copper stocks in warehouses monitored by the Shanghai Futures Exchange (ShFE), which at around 89,000 tons have dropped nearly 70% since late February and are at their lowest since mid-January.
Copper extends gains on hopes for truce in trade war
However, expectations of copper market surpluses are worrying the market, traders said. A Reuters survey published last week shows a small copper market surplus of more than 60,000 tons this year, followed by a small deficit in 2026.
“We suspect these estimates will be reduced in due course, especially if supply-side issues persist,” said Marex consultant Edward Meir, referring to shortages of concentrate used to make copper metal.
On the technical front, strong support for copper is around $9,310-$9,315 where the 100- and 200-day moving averages are converging. Upside resistance is around $9,475, the 50-day moving average.
Overall, industrial metals were supported by the lower U.S. currency, which makes dollar-priced metals cheaper for holders of other currencies, which would boost demand.
Aluminium fell 0.5% to $2,419 a ton, zinc added 0.7% to $2,626, lead gained 0.3% to $1,939, tin was up 3.5% to $31,775 and nickel climbed 0.8% to $15,610 a ton.
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