LME copper falls with muted risk appetite ahead of bumpy next week

LONDON: Copper prices fell in London on Friday on muted risk appetite ahead of next week’s deadline for broad U.S. reciprocal tariffs, worsening prospects for global economic growth and easing stimulus to deliver copper to the U.S. ahead of possible tariffs.

Benchmark three-month copper on the London Metal Exchange was down 0.5% at $9,799 a metric ton by 1110 GMT after hitting $9,739, its two-week low.

The metal, used in power and construction, is so far up 12% this quarter, on track for its best quarterly growth in four years, prompting some to book profits.

Uncertainty is high as U.S. President Donald Trump plans to announce reciprocal tariffs aimed at the countries responsible for the bulk of the U.S. trade deficit on April 2 and his already-announced 25% tariffs on auto imports would take effect on April 3.

Expectations that Washington’s separate investigation on whether to impose new import tariffs in copper would take months shifted to weeks on Wednesday, narrowing down the window for arbitrage play between the most active U.S. Comex copper futures and the LME ones.

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The premium of Comex over LME prices, a global benchmark, eased to $1,469 a ton, or 15%, after hitting a record high of $1,615 earlier this week.

“Early tariff resolution removes some of the geographical pressures that had manifested itself in a LME term structure bid,” said Alastair Munro, senior base metals strategist at broker Marex.

Adding a extra layer of pressure was market speculation that if Washington announces the copper tariffs soon and does not grant a waiver to the metal already on water then this copper could be redirected to the LME-registered warehouses, Munro added.

The on-warrant copper stocks in the LME system, currently at the lowest since May, saw a sharp fall since mid-February as traders rushed to swap and redirect supplies to the U.S.

Among other metals, LME aluminium eased 0.1% to $2,561 a ton, zinc lost 1.5% to $2,857, lead fell 0.9% to $2,023, while tin gained 2.9% to $36,245 and nickel added 1.1% to $16,420.