Copper registered a second weekly decline in London as the market digested the impact of President Donald Trump’s shock decision to exempt refined forms of the metal from hefty US import tariffs.
The industrial metal steadied on Friday on the London Metal Exchange but was down 1.4% for the week. In the US, where traders had been moving large volumes of copper in anticipation of the tariffs, copper has plunged by more than 20% this week.
Trump imposed 50% tariffs on semi-finished copper products such as pipes, wires, rods, sheets and tubes from Friday, but exempted less-processed forms of the metal including ore, concentrates and cathodes. New York futures’ big premium over London evaporated in response.
Traders are now rushing to book storage space for copper in a bet that Trump’s decision will prompt a wave of supplies that have been stockpiled in the US to be shifted to LME warehouses. Holdings of the metal in warehouses monitored by the LME, Comex and the Shanghai Futures Exchange have recovered in July after dropping in each of the previous four months.
Copper prices may come under pressure in the near term due to the unwind of the US copper tariff trade, wrote Daniel Major, analyst at UBS Group AG. “We remain structurally constructive on the fundamental outlook for copper, but have become more cautious on the near-term outlook as we are concerned that the physical market has been distorted by tariffs,” he said.
Copper edged up 0.2% to settle at $9,630.50 a ton on the LME at 5:50 p.m. in London. Comex copper rose 1.9% to settle at $4.4355 a pound. Other main LME metals except zinc advanced.
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