London copper eased on Monday, as the US dollar firmed after President Donald Trump threatened to impose tariffs on Colombia, while the focus was also on the Federal Reserve’s policy meeting for cues on the interest rate trajectory.
Three-month copper on the London Metal Exchange (LME) fell 0.3% to $9,246 a metric ton by 0330 GMT, after scaling its highest since Nov. 12 on Friday.
The most-active copper contract on the SHFE steadied at 75,500 yuan ($10,396.87) a ton.
The dollar index was up 0.2%, making greenback-priced commodities more expensive for holders of other currencies. Last week, tariff concerns had eased slightly after Trump said a trade deal with China was possible.
However, those fears resurfaced after Trump said on Sunday he would impose tariffs and sanctions on Colombia for turning away military aircraft carrying migrants being deported.
Market interprets Trump’s tariff threats on Colombia as a signal for potential green light for additional tariffs, said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
“In the short term, tariff concerns will weaken base metals, especially copper. However, medium-term support may come from potential China stimulus expected in March.”
Copper hits 10-week peak on hopes for Trump deal with China
China is the world’s biggest metal consumer. China’s manufacturing activity unexpectedly contracted in January, an official factory survey showed, its weakest since August, keeping alive calls for stimulus in the world’s second-largest economy.
The Fed will likely hold interest rates steady when it concludes its two-day meeting on Wednesday and resume cutting in June, according to the CME Group’s FedWatch Tool.
LME aluminium eased 0.5% to $2,627.5, tin lost 0.2% to $30,100, nickel fell 0.1% to $15,655, lead rose 0.5% to $1,949 and zinc rose 0.1% to $2,831.5.
SHFE aluminium fell 0.4% to 20,190 yuan a ton, zinc slid 0.9% to 23,600 yuan, lead lost 0.1% to 16,755 yuan, while tin gained 0.6% to 248,510 yuan and nickel rose 0.5% to 124,550 yuan.
American Dollar Exchange Rate