LONDON: Industrial metals prices rose on Monday as growth and demand fears eased after China and the US agreed a deal to reduce reciprocal import tariffs and seek an end to their trade war, though traders said the market remained cautious.
Benchmark copper on the London Metal Exchange (LME) was up 0.7% to $9,507 a metric ton at 1603 GMT while aluminium gained 2.5% to $2,477. Speaking after talks with Chinese officials, US Treasury Secretary Scott Bessent said the two sides had agreed a 90-day pause on their steep tariffs and that the levies would come down by more than 100 percentage points to a 10% baseline rate.
“People are hopeful the tariff situation will be sorted out, but they are still nervous,” one copper trader said.
US President Donald Trump had boosted tariffs on imports from China to 145%, in addition to those he imposed on many Chinese goods during his first term in office and the duties levied by the previous Biden administration.
“This is a much less hostile set-up for US-China relationships and the global economy, but significant uncertainty remains for companies and households,” Societe Generale analysts said in a note.
“In the coming 90 days there is likely to be significant front-loading of trade flows between the US and China.” In other metals, worries about lead supplies on the LME market have created a premium, or backwardation, around $7 a ton on Monday for cash metal over the three-month contract.
Traders said the premium was a result of falling lead stocks in LME-registered warehouses, large holdings of warrants and one long position holding more than 40% of lead contracts alongside several short positions due to mature this month.
Cancelled lead warrants - metal earmarked for delivery - amounted to 52% of total stocks at 251,800 tons, indicating that more metal is due to leave the LME system.
Three-month lead was down 0.2% at $1,976 a ton, zinc climbed 0.9% to $2,677, tin gained 1.9% to $32,500 and nickel slipped 1.3% to $15,590.
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