LONDON: U.S. copper prices rebounded on Thursday after U.S. President Donald Trump said a 50% tariff would start on August 1, but held below their record peak due to a glut of metal already in the country and uncertainty over details.
Trump signalled on Tuesday that he was imposing fresh tariffs on copper. He confirmed that and announced the date on Wednesday.
The most active COMEX copper futures contract was up 2.1% to $5.60 a lb at 0945 GMT, down from a record high of $5.90 touched on Tuesday.
“I think the spike high will probably be left on its own for a little while,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
“The market will now be left with ample supplies for the foreseeable future and that’s one reason why premiums in New York should not reflect the 50% tariff,” he said.
“Also, plenty of things can happen in the next three weeks.”
The premium of COMEX over LME on Thursday was at $2,690 a metric ton, or 28%, down slightly from a peak hit on Tuesday.
Trump copper tariffs set to spark final scramble to get metal across the border
Traders anticipating copper tariffs after a probe was announced in February have shipped about a year’s worth of imports so far this year to the United States.
Analysts say the COMEX premium will likely ease over coming months as the stockpile is slowly eroded and the stiff tariffs hit demand.
Copper prices on the Shanghai Futures Exchange came under pressure, weighed down by expectations that copper shipments to China will rise as some supplies are redirected to countries outside the U.S., a Shanghai-based metals analyst at a futures company said.
The most-traded copper contract on the SHFE fell for the fifth day, down 0.4% to 78,600 yuan ($10,952.87) per ton after touching its lowest since June 23.
Benchmark three-month copper on the LME rebounded on Thursday after five days of losses, rising 0.5% to $9,681.50 a ton.
Among other metals, LME aluminium added 0.6% to $2,613 a ton, nickel gained 1.2% to $15,165, zinc climbed 1.2% to $2,774, lead was up 0.1% at$2,057, and tin advanced 1.2% to $33,675.