SINGAPORE: Copper prices eased on the London Metal Exchange and Shanghai Futures Exchange on Tuesday, as uncertainty over US trade tariffs and the potential for increased copper supply from Chile, the world’s largest producer, weighed on the market.
Three-month copper on the LME was down 0.2% at $9,810 per metric ton, as of 0109 GMT, and the most-traded copper contract on the SHFE eased 0.16% to 79,380 yuan ($11,064.34) a ton.
Still, both contracts were trading at their high levels since April.
The United States sent formal notices to 14 countries on Monday announcing new tariffs ranging from 25% to 40%, set to take effect on August 1.
Additionally, US President Donald Trump warned that an extra 10% tariff could be imposed on BRICS nations, including Brazil, Russia, India, and China, if they pursue what he described as “anti-American” policies during their summit in Brazil.
“The market focus is still very much on the US trade tariffs, as all have not been finalized, and higher copper export value from Chile probably suggests a higher supply volume,” said a Beijing-based metals analyst from a futures company.
Chile exported $4.67 billion worth of copper in June, marking an increase of 17.5% in the year-ago period.
“Chilean copper mines had their best month of export revenue in over three years in June,” ANZ said.
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Copper is still flowing to the US, as Washington’s ongoing investigation into potential new copper import tariffs keeps the premium of COMEX copper futures over the LME benchmark elevated, and the COMEX copper stocks are at a seven-year high, or up 120% since mid-February, LME nickel edged 0.18% lower to $15,150 a ton, while zinc gained 0.24% to $2,691, tin inched up 0.12% to $33,325, and aluminium up 0.1% at $2,576.
SHFE zinc lost 0.68% to 22,035 yuan a ton, lead fell 0.55% to 17,115 yuan, nickel went down 0.53% to 120,540 yuan, and tin dropped 0.5% to 264,360 yuan.
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