LONDON: Base metal prices ticked lower on Friday after US President Donald Trump said he would impose 50% tariffs on goods from the European Union, but copper recovered on worries about problems at a big mine in Congo.
Benchmark three-month copper on the London Metal Exchange (LME) slipped 0.4% to $9,561 a metric ton in official open-outcry trading. Copper erased earlier gains and went into the red along with other financial markets after Trump said he was recommending the 50% duties on the EU take effect on June 1.
“It’s a big macro thing with the new Trump tariffs driving things. Is it one step forward and two steps back?”, said Dan Smith, managing director at Commodity Market Analytics. Smith was referring to a 90-day tariff truce agreed by Washington and Beijing earlier this month to pause their trade war, which has helped copper gain 5% so far this month.
LME copper moved back into positive territory by 1305 GMT, however, rising 0.3% to $9,532. Smith attributed the move to news from Chinese miner Zijin about pausing operations in its Kamoa-Kakula copper mine in the Democratic Republic of Congo due to tremors.
Zijin warned that the problems may have an “adverse impact” on achieving planned production this year of 520,000 to 580,000 tons. “It sounds fairly bad and obviously it’s a pretty big mine,” Smith said.
Co-owner Ivanhoe Mines said on Tuesday it had suspended some operations at the mine, but it did not refer to weaker output. Providing further support, the dollar headed for its first weekly drop against a range of currencies in five weeks. A weaker US currency makes dollar-priced metals more attractive for buyers using other currencies.
Copper inventories in warehouses monitored by the Shanghai Futures Exchange fell 9% to 98,671 tons this week, while stocks in the LME-registered warehouses lost 8% to 164,725 amid continuing inflows into the COMEX-owned warehouses.
The COMEX inventories are up 3% to 174,607 this week. Meanwhile, LME aluminium was little changed in official activity at $2,457 a ton; zinc slipped 0.4% to $2,688, nickel lost 0.6% to $15,400, lead eased 1% to $1,950 while tin gained 0.5% to $32,525.
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