Copper falls as market braces for new US tariffs on China

LONDON: Copper prices fell towards 14-month lows on Friday and were set for a second consecutive weekly loss as investors braced for new US tariffs on China.

A public comment period for proposed tariffs on Chinese imports worth $200 billion passed at 0400 GMT. China has warned it would retaliate if they are applied.

Fears that tariffs will damage economic growth and demand for metals are hitting copper despite positive supply and demand fundamentals, Societe Generale analyst Robin Bhar said.

"Everyone is waiting for the tariffs to be applied or not. Rebounds in metals (prices) will simply not get going while you have these macro fears," he said.

COPPER: Benchmark three-month copper on the London Metal Exchange was down 0.6 percent at $5,890 a tonne at 1045 GMT, nearing its August low of $5,773 and down 1.4 percent this week.

PRICE ROUT: The US-China trade conflict has helped push copper prices down some 20 percent since early June. China accounts for nearly half of global copper demand estimated at around 24 million tonnes this year.

COPPER STOCKS: On-warrant stocks of copper available to the market in LME-registered warehouses rose by 850 tonnes to 147,450 tonnes but are still down from more than 234,000 tonnes in mid-August, signalling a tighter market.

CHINA STOCKS: Stockpiles in Shanghai Futures Exchange (ShFE) warehouses have fallen to 136,051 tonnes from more than 300,000 tonnes in April.

CHINA TREATMENT CHARGES: Treatment and refining charges (TC/RCs) paid to China's copper smelters are set to drop below $80 a tonne next year as processing capacity expands and copper concentrate falls into a deficit.

ALUMINIUM/RUSAL: LME Aluminium was up 1.5 percent at $2,070.50 a tonne - though still down 2.6 percent this week - after Reuters reported that European customers would avoid deals with Russian producer Rusal, which is under US sanctions, at an industry event next week.

ALCOA STRIKE: Workers at Alcoa's alumina and bauxite operations in Western Australia voted to continue a strike.

Alcoa has said the strike had cut production of alumina, used to smelt aluminium, by only about 15,000 tonnes in August. "However, prolonged industrial action will be a concern to many with the market already tight," analysts at ING said. Higher alumina prices could raise the cost of aluminium.

ALUMINIUM SPREAD: The discount of cash aluminium over the three-month contract rose to the highest since October 2015 at $37.50.

OTHER METALS: Nickel was down 0.5 percent at $12,380 a tonne, the lowest since 2015. Zinc was 1.1 percent lower at $2,415.50, lead had gained 1.4 percent to $2,065.50 and tin was up 1.3 percent at $19,105.