LONDON: Copper prices fell in London on Wednesday on subdued expectations that an upcoming meeting between key US and Chinese officials will yield an immediate outcome after months of escalating trade tensions.
Benchmark three-month copper on the London Metal Exchange (LME) shed 0.8% to $9,462 a metric ton in official open-outcry trading after hitting $9,582 for its highest since April 3 in early Asian trading hours. US and Chinese representatives will meet this weekend for talks that could be the first step toward resolving a trade war which pushed import duties between the world’s two largest economies well above 100%.
“Any sign of de-escalation would be helpful, and the talks are a gesture for the market to feel relatively more calmer. However, just making statements, without those tariff numbers going down, doesn’t really help,” said Nitesh Shah, commodity strategist at WisdomTree. “We are still in a fairly noisy period with question marks on where the trade policies would end up.”
While trade tariffs inflate risks for global demand for growth-dependent metals in the longer term, the trade spat and a separate copper-specific investigation in the US are tightening the short-term availability of copper on the Shanghai Futures Exchange (SHFE) and in the LME system.
The premium of the COMEX copper futures against the LME prices has been elevated for several months as Washington continues its probe on whether to impose new copper import tariffs.
Comments
Comments are closed for this article.