LONDON: Copper prices rose on Tuesday as the United States delayed import tariffs on Mexican and Canadian goods, although worries about trade tensions and global growth risks persisted as the U.S. and China, the world’s top two economies, exchanged trade curbs.
Three-month copper on the London Metal Exchange (LME) rose 0.5% to $9,146 a metric ton by 1107 GMT.
The metal, used in power and construction and often seen as an indicator of global growth, touched a four-week low on Monday before recovering as U.S. President Donald Trump suspended the imposition of steep tariffs on Mexico and Canada for a month.
However, an additional 10% tariff on Chinese imports came into effect on Tuesday, and was met with a package of retaliatory measures from China, which included stricter export regulations for tungsten and four other critical metals.
While there was some relief that the amount fell short of Trump’s campaign promises of 60% tariffs on Chinese goods, market volatility is expected to persist.
Aluminium and copper prices fall on potential Trump tariffs
Trump, who described his move as an “opening salvo”, will speak with Chinese President Xi Jinping as soon as this week, according to the U.S. President’s spokesperson. China’s main markets will reopen after the Lunar New Year holiday on Wednesday.
“The uncertainty surrounding tariffs and the potential risks of a global trade war suggest a challenging short-term outlook (for metals),” said Ole Hansen, head of commodity strategy at Saxo Bank.
“However, prices are currently supported by a rising premium for copper in New York over London, driven by concerns over supply disruptions and speculation about potential measures China might take to boost domestic demand.”
Most active U.S. Comex copper futures gained 0.6% to $4.331 a lb, representing a premium of $402 a ton over the LME benchmark.
LME aluminium was steady at $2,622 a ton, zinc gained 0.8% to $2,820, tin added 0.8% to $30,135, lead climbed 0.6% to $1,957, while nickel fell 0.7% to $15,100.
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