Prices for copper and other base metals fell on Monday as President Donald Trump said the United States was close to finalising several trade pacts in the coming days.
The U.S. will notify other countries of higher tariff rates by July 9, Trump said, with the higher rates set to take effect on August 1. Trump also said any countries aligning with the “anti-American” policies of the BRICS group of developing nations would face an additional 10% tariff.
The three-month copper contract on the London Metal Exchange (LME) eased 0.5% to $9,815 per metric ton in official open-outcry trading. On the technical front, the contract is supported by the 21-day moving average at $9,767.
“Everyone is taking a bit of profit due to the threat of additional tariffs because there was a lot of optimism already built into the current prices over the past month,” said Dan Smith, managing director at Commodity Market Analytics.
Copper, used in power and construction, hit a three-month high of $10,020.5 a ton last week.
As Washington’s ongoing investigation into potential new copper import tariffs keeps the premium of COMEX copper futures over the LME benchmark elevated, COMEX copper stocks are at a seven-year high, up 120% since mid-February.
“This copper is effectively trapped in the U.S. at the moment, creating a bit of the squeeze,” Smith said. “A lot of inventory is in the wrong place, and it is hard to access it.”
The copper stocks in the LME-registered warehouses, currently at 97,400 tons, have edged up since the start of July, but are still down 64% since mid-February.
LME aluminium fell 1.0% to $2,564 a ton in official activity, zinc shed 1.1% to $2,695, lead eased 1.0% to $2,038, tin slipped 0.6% to $33,495 and nickel lost 1.2% to $15,100.
(Reporting by Polina Devitt; Editing by Leroy Leo and Jane Merriman)
