Copper falls on firm dollar, Trump’s tariffs plan

Copper prices fell on Tuesday, weighed down by a stronger U.S. dollar and U.S. President-elect Donald Trump’s pledge to levy more tariffs on Chinese products.

Three-month copper on the London Metal Exchange (LME) CMCU3 was down 0.6%at $8,990.50 per metric ton by 0700 GMT, while the most-traded January copper contract on the Shanghai Futures Exchange (SHFE) SCFcv1 closed down 0.3% to 73,740 yuan ($10,162.48) a ton.

On Monday, Trump pledged an additional 10% tariff on goods from China and a 25% tariff on all products from Mexico and Canada from his first day in office.

China accounts for around half of the world’s metals consumption and manufactures most of the world’s goods.

The proposed tariffs will likely hurt economic growth and disrupt trade flows, which could eventually lower the consumption of metals.

The plan pushed the dollar higher against major currencies, making greenback-priced metals more expensive to holders of other currencies.

A broker said the fall in metals prices was marginal because the market had already reacted to the tariffs plan after Trump won the White House on Nov. 5 and as some traders were expecting higher tariffs on China.

China’s peak demand season, which spans from November to December, has also prevented a further decline in copper prices, with SHFE inventories falling and import premiums rising to a one-month high of $53 a ton SMM-CUYP-CN.

LME copper is also supported around the $9,000 price level, the broker said.

On Tuesday, LME aluminium CMAL3 fell 0.7%to $2,633.50 a ton, nickel CMNI3 shed 0.9% to $16,060, zinc CMZN3 rose 0.4%to $3,031, lead CMPB3 was down 0.6% at $2,017.50 and tin CMSN3 edged down 0.1% at $28,950.

SHFE aluminium SAFcv1 rose 0.1%to 20,560 yuan a ton, nickel SNIcv1 climbed 0.4% to 127,510yuan, zinc SZNcv1 climbed 1.5%to 25,175 yuan, lead SPBcv1 advanced 0.2%to 17,200 yuan, while tin SSNcv1 fell 0.4% to 241,800yuan.
Source: Reuters (Reporting by Mai Nguyen in Hanoi; Editing by Eileen Soreng, Sonia Cheema and Janane Venkatraman)