LONDON: Copper prices fell on Friday under pressure from a stronger dollar, while mounting worries that the United States may impose new import tariffs on the metal kept the New York futures premium over the London price near the record high.
Benchmark three-month copper on the London Metal Exchange (LME) fell 1% to $9,834 a metric ton by 1445 GMT. The contract hit its five-month high of $10,046.50 on Thursday.
Most active copper futures on the US Comex exchange were last down 0.9% at $5.065 a pound. They hit a 10-month high on Thursday. About a month ago, US President Donald Trump ordered a probe into potential new tariffs on copper imports with the aim to rebuild US production of the metal.
Technically, the probe can take up to nine months. “Supply concerns over potential tariffs have played out on the CME-LME spread, with the US heavily reliant on copper imports,” said Natalie Scott-Gray, senior metals analyst at StoneX.
US imports about 40% of its needs in copper, including from Canada, targeted by Trump’s tariff policy. US 25% tariffs on steel and aluminium products took effect last week. Trump has also said that his “reciprocal tariffs” to bring US tariffs to other countries’ levels will take effect on April 2.
The premium of the Comex contract over the LME one hit a record high of $1,346 per ton on Thursday and was last at $1,334, or 13%. StoneX estimates that it would rise to $2,000 if the US decides to impose 25% copper tariffs. The incentive to deliver copper to the US ahead of possible tariffs has also resulted in some trade re-routing with traders swapping the LME-deliverable copper with producers and consumers for CME-deliverable brands, StoneX added.
The on-warrant copper stocks in the LME system fell to 117,775 tons, the lowest since June, after 8,200 tons of fresh cancellations, daily LME data showed. Cancelled stocks currently represent 48% of the LME’s total copper stocks. LME aluminium fell 1.1% to $2,630 a ton, zinc rose 0.2% to $2,924.50, lead lost 1.2% to $2,032.50, tin dropped 1.9% to $34,655, while nickel slid 1% to $16,115.
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