LONDON: Copper prices jumped to their highest in more than a month after Donald Trump was quoted as saying the United States will not impose tariffs on trading partners as soon as he is sworn in as President later on Monday.
Worries about U.S. import tariffs, particularly the threat of a 60% levy on Chinese shipments, and the possibility of trade wars hurting global trade and growth have been a major market focus since the U.S. election in November.
Traders said that fear had receded for now.
Benchmark copper on the London Metal Exchange (LME) was up 0.7% to $9,255 a metric ton at 1547 GMT after earlier peaking at $9,297, the highest since Dec. 11.
Also supporting industrial metals were hopes that the Federal Reserve will cut interest rates at a faster pace, after U.S. data suggested that underlying price pressures could be easing.
“U.S. inflation expectations have changed. There is market adjustment around the rate cut profile. Metal markets have just mechanically responded to that,” said Panmure Liberum analyst Tom Price.
Aluminium, copper rise on strong Chinese data
“If (Trump) starts going big on tariffs, like he did in 2018, people will want inflation protection. Gold and copper are favourite inflation plays.”
Lower U.S. interest rates typically mean pressure on the U.S. currency, which could make dollar-priced metals cheaper for holders of other currencies.
A Reuters survey last week showed a slim majority of economists expect the Fed to keep interest rates steady on Jan. 29 and resume cutting in March.
China’s robust GDP growth in the final quarter of last year was another factor behind positive sentiment, traders said.
The Yangshan premium, meanwhile, suggests stronger Chinese demand. At $76 a ton, this gauge of China’s appetite for importing copper has gained 76% since early November.
In other metals, aluminium gained 0.4% to $2,694 a ton, zinc added 0.9% to $2,969, lead rose 1.2% to $1,991, tin rose 1.2% to $30.150 and nickel was flat at $19,095.
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