LONDON: Copper prices extended gains on Thursday to their highest levels in nearly three weeks after US President Donald Trump granted a temporary exemption to automakers from tariffs.
Three-month copper on the London Metal Exchange was up 0.5% at $9,635 a metric ton by 1100 GMT, its highest level since February 14, after jumping by 2.6% a day earlier.
Trump carved out a one-month exception on Wednesday for the metals-intensive auto sector from 25% tariffs slapped on Canada and Mexico. “It has helped most metals because it gives them a little bit more time to be used in cars without facing the immediate tariffs and maybe also demonstrates some flexibility,” said Nitesh Shah, commodity strategist at WisdomTree.
The most-active copper contract on the Shanghai Futures Exchange gained 1.6% to 78,310 yuan ($10,813.31) a ton, a level not seen in more than two weeks. On the US Comex exchange, however, most-active May copper futures dropped 0.9% to $4.75 a lb as investors adjusted their expectations of tariffs Trump may impose on copper.
Trump has announced 25% tariffs on aluminium and steel imports from March 12 and has ordered a probe into possible new tariffs on copper. The premium of Comex over LME copper narrowed to $872 per ton from $984 on Wednesday.
Gains in industrial metals were capped after investors digested news coming out of China’s National People’s Congress this week. The NPC resulted in pledges for more fiscal stimulus and a focus on boosting consumer spending, but the immediate steps unveiled to boost household demand under whelmed economists.
“The question now that we know the tariffs are in place for China, does it require a bit more to counterbalance that,” Shah said. Metals were also supported by a softer dollar, with its index slipping to a four-month low, making greenback-priced commodities cheaper for buyers holding other currencies.
LME aluminium gained 1.1% to $2,687 a ton, zinc advanced 1.4% to $2,918.50, lead was up 0.2% at $2,038.50, nickel climbed 1.1% to $16,075 and tin climbed 1.1% to $32,065.
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