LONDON: Copper prices dropped on Monday to their weakest in more than two weeks on worries about new U.S. tariffs due this week, but the losses were cushioned by strong factory data from top metals consumer China.
Benchmark three-month copper on the London Metal Exchange was down 0.8% at $9,720 per metric ton in official rings, having earlier touched $9,702.5, its lowest since March 12.
U.S. President Donald Trump announced on Sunday reciprocal tariffs he plans to introduce this week will apply to all nations, sending stocks and other financial markets spiraling down.
But data on Monday showed China’s manufacturing activity expanded at the fastest pace in a year in March.
Copper rallies to one-month peak on signs of improving demand
“The Chinese data are keeping the market from aggressively giving back some of these recent strong gains. We’re still holding at relatively high levels,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
LME copper has gained 11% so far this year while the U.S. Comex market has surged by 27%.
Traders have been buying copper to send to the United States ahead of expected tariffs on the metal, but as those tariffs are due to be imposed in the coming weeks, people are running out of time to make those trades, Hansen added.
U.S. Comex copper futures slipped 0.7% to $5.12 a lb, putting the premium of Comex over LME at $1,542 a ton.
“I think the fact that the arbitrage window has closed, or is closing, brings the risk that the Comex contract could suddenly see significant further weakness,” Hansen said.
Tin prices on the Shanghai Futures Exchange bucked the downward trend, rising 0.4% to 282,350 yuan ($38,938.92) due to fears of supply disruptions from an earthquake in tin-rich Myanmar last Friday.
On the LME, however, tin lost 1% to $35,840 a ton.
Among other metals, LME aluminium fell 0.3% to $2,540 a ton, zinc shed 0.5% to $2,842, lead eased 0.4% to $2,018, and nickel retreated 2.5% to $15,970.
American Dollar Exchange Rate