LONDON: Copper prices rose on Tuesday as support from a weaker dollar and a decline in available inventories in the London Metal Exchange (LME) system put the worries about U.S. import tariff policy on pause.
Three-month copper on the LME added 1.1% to $9,630.50 a metric ton by 1106 GMT. The metal, used in power and construction, fell on Monday amid a broad market sell-off.
As tariffs are bearish for copper and other growth-dependent metals in the context of potentially slowing global growth and keeping inflation higher for longer, the market focus is on U.S. consumer price index data due on Wednesday.
“With growth in the U.S. likely to slow on the back of tariffs and China (top metals consumer) already struggling to revive its economy, demand for copper and other industrial metals is likely to weaken,” said Ewa Manthey, a commodities analyst at ING.
Copper hit a four-month high of $9,739 last week after U.S. President Donald Trump granted exemptions for automakers from 25% tariffs on Canada and Mexico for one month.
Wednesday is the launch date previously set by the Trump administration for U.S. 25% import tariffs on aluminium and steel. The US imports 80% of its needs in aluminium, mainly from Canada and Mexico.
Copper under pressure from tariffs and growth angst
If implemented tomorrow, tariffs would result in higher aluminium prices in the U.S. with a significant upside risk to the U.S. Midwest premium, which is already elevated, Manthey said.
Trump also previously ordered a probe into possible new tariffs on copper which continues and keeps the premium between the most active U.S. Comex copper futures and the LME contract elevated.
Suggesting that part of the market was boosting supplies to the U.S., LME daily data showed on-warrant copper stocks in LME-registered warehouses fell to 136,300 tons, lowest since mid-June, after 11,675 tons of new cancellations.
Among other metals, LME aluminium added 0.3% to $2,701 a ton, lead was down 0.1% at $2,047.50, tin rose 0.3% to $32,730 and nickel fell 0.6% to $16,450.
Zinc rose 1.5% to $2,899 as LME on-warrant stocks fell to 94,700 tons, their lowest since November 2023, after 42,575 tons of fresh cancellations.