LONDON: Copper prices steadied on Monday near 10-week highs hit last week as the market waited to see how the US-China trade dispute would develop after both countries imposed fresh tariffs.
Benchmark copper on the London Metal Exchange was down 0.1 percent at $6,355 a tonne at 1024 GMT. The metal seen as a gauge of economic health hit $6,382.5 on Friday, a gain of 4.62 percent, the largest one-day rise since May 2013.
Friday's rally was mainly due to tariff levels that were much lower than expected.
"The market was fretting US tariffs could be as high as 25 percent from the start. It was a relief rally. Let's see if it can be sustained," Societe Generale analyst Robin Bhar said.
"Fundamentals are pretty sound, demand is strong."
TARIFFS: US tariffs on $200 billion of Chinese goods and retaliatory tariffs by Beijing on $60 billion of US products took effect on Monday.
The United States will levy tariffs of 10 percent initially, rising to 25 percent at the end of 2018. Beijing has imposed rates of 5-10 percent and warned it would respond to any rise in US tariffs on Chinese products accordingly.
STOCKS: Strong copper demand can be seen in stocks held by LME-registered warehouses, which at 214,350 tonnes are down more than 40 percent since late March and near their lowest since January.
Cancelled warrants - metal earmarked for delivery and no longer available - stand at 32.5 percent.
HOLDINGS: Worries about nearby tightness on the LME market have been reinforced by two large holdings - between 30 and 39 percent - of copper warrants.
That has created a premium of $16 a tonne for the cash over the three-month contract.
DEMAND: China accounts for nearly half of global copper demand estimated this year at 24 million tonnes.
PREMIUMS: Premiums for metal on the physical market in China are at $122 a tonne, up nearly 40 percent since August.
RUSAL: The US Treasury on Friday had extended until Nov. 12 a deadline for investors to divest holdings of debt, equity and other assets in sanctions-hit Russian companies EN+ and Rusal.
ALUMINIUM: Expectations that sanctions on Rusal, a top aluminium producer, will be lifted after the US mid-term elections on Nov. 6 are weighing on prices of the transport and packaging metal.
"The extension suggests a softening and an eventual lifting of the sanctions," a source at a commodities trading firm said.
PRICES: Aluminium was down 1.1 percent at $2,067, zinc gained 1.5 percent to $2,533, lead rose 0.4 percent to $2,047, tin fell 0.5 percent to $18,905 and nickel slid 1.3 percent to $13,080.
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