Copper prices rose on Tuesday after the United States said it would cut some tariffs on imports from China, where inventories have dropped significantly, though gains were capped by market caution.
Benchmark copper on the London Metal Exchange was up 0.3% at $9,544 a metric ton as of 0940 GMT.
The United States said on Monday it will cut the “de minimis” tariff on low-value items imported from China, further de-escalating a trade war between the world’s two largest economies.
The order comes in the wake of Beijing and Washington announcing a temporary truce in their trade spat after weekend talks, with both sides agreeing to unwind most of the tariffs imposed on each other’s goods since early April. “Despite the optimism, there are reasons to remain cautious; the U.S.-China talks are only just beginning,” said ING commodities analyst Ewa Manthey.
Manthey added that the tariffs remain significant and could impact raw material consumption, while a continued dollar rally might also pose a hurdle to metals prices.
Copper steady ahead of US-China trade talks, focus on tighter nearby supply
The dollar held most of its gains, lingering near one-month highs. A stronger U.S. currency makes metals costlier for other currency holders.
Citi said in a note that copper prices “can remain resilient” between $9,000-$10,000 in the coming weeks amid a tightening of China’s physical copper indicators until tariff-related demand shocks materialise.
Copper stocks in warehouses monitored by the Shanghai Futures Exchange (SHFE) stood at 80,705 tons last week, having dropped 70% since the end of February.
Meanwhile, stocks in COMEX-owned warehouses rose to their highest levels since 2018. A pending probe in Washington that could lead to new copper tariffs is attracting metal into the United States.
Among other metals, aluminium eased 0.2% to $2,474 a ton, zinc fell 0.5% to $2,667, lead gained 0.8% to $1,992.5, nickel fell 0.1% to $15,620 and tin slipped 0.1% at $32,550.
Market focus is on U.S. inflation data later on Tuesday for clues to the Federal Reserve’s monetary policy stance.
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