US copper futures surge as tariff fears loom
U.S. copper futures surged nearly 6% on Monday, widening their premium over London prices amid rising speculation about possible new import tariffs following President Donald Trump's latest aluminium trade measures.
Trump said on Friday he planned to increase tariffs on imported steel and aluminium to 50% from 25%.
U.S. Comex copper futures gained 5.7% to $4.9175 a pound, the highest since April 3. Benchmark three-month copper on the London Metal Exchange (LME) rose 1.1% to $9,597.50 per metric ton by 0944 GMT.
The premium on COMEX copper over the LME price, a global benchmark, widened to $1,231 per ton from $759 on Friday .
"Although copper wasn't even mentioned in Trump's latest announcement, markets are clearly pricing in the risk of import tariffs following the February investigation - highlighting strong investor demand for the metal," said Panmure Liberum analyst Tom Price.
In February, Trump ordered a probe into possible new tariffs on copper imports to rebuild U.S. production of a metal critical to electric vehicles, military hardware, and semiconductors.
LME aluminium steadied at $2,443.50 a ton, after earlier touching its lowest level since May 12 at $2,425.50. The U.S. Midwest aluminium premium jumped 54% from Friday to $0.58/lb or $1,279 a ton.
Goldman Sachs in a note said that if the higher metals tariffs come into and remain in effect, the U.S. Midwest aluminium premium would rise to around $0.68-0.70/lb.
Lead rose 0.9% to $1,975, zinc gained 1.7% to $2,663.50, tin edged 0.8% higher to $30,600 and nickel was up 0.9% at $15,365.
Providing support to the industrial metals was a softer U.S. dollar, making metals more affordable for holders of other currencies.
The Dragon Boat Festival holiday in China kept Asian participation muted on Monday, said Neil Welsh, head of metals trading at Britannia Global Markets.
(Reporting by Ashitha Shivaprasad in Bengaluru and Polina Devitt in London Editing by Kirsten Donovan)
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