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Business Recorder
10-05-2025
- Business
- Business Recorder
Copper steady ahead of US-China trade talks, focus on tighter nearby supply
LONDON: Copper steadied on Friday ahead of US-China trade talks, with the market focused on tighter nearby supply, reflected in the premium for nearby copper contracts against those further out hitting a 2-1/5 half-year high. Benchmark three-month copper on the London Metal Exchange (LME) was unchanged at $9,432 a metric in official open-outcry trading. US President Donald Trump said that 80% tariffs on Chinese goods 'seems right' as representatives prepared for weekend talks to contain a trade war between the world's two largest economies which poses long-term risks to global metals demand. In the short term, the trade spat and a separate investigation in Washington on whether to impose new copper import tariffs have been reducing the availability of copper on the Shanghai Futures Exchange (SHFE) and within the LME system by attracting more metal into the COMEX-owned warehouses. 'The overall tightening in copper's fundamentals can been seen with widening backwardations for near-month contracts on the LME and SHFE,' said Natalie Scott-Gray, senior metals analyst at StoneX. This tightness is temporary and will not offset the wider implications of a long-lasting US-China trade war, she added. As outflows to the US coincided with the seasonal growth of demand in China, copper inventories in SHFE-monitored warehouses have been falling faster than originally expected in recent weeks. These stocks fell 9.6% this week and are down 70% since end-February, widening the premium of SHFE June copper contracts over the October ones. On the LME, the spread between the cash LME and the three-month copper contract was last at a premium of $49 a ton, the highest since November 2022. It swung from a discount of $63 in early April as stocks in the LME-registered warehouses continue to see outflows. Indicating robust import demand in top metals consumer China, the Yangshan copper premium is at $102 per ton, the highest since December 2023 versus $35 at end-February. China's copper concentrate imports reached a record high in April, spurred by an expansion of domestic copper smelting capacity, while unwrought copper imports were steady amid high shipments to US from Asia. LME aluminium was flat at $2,412 a ton, zinc rose 1% to $2,645, lead added 1.7% to $1,978, and nickel was up 0.5% to $15,615, while tin fell 0.7% to $31,650.
Business Recorder
09-05-2025
- Business
- Business Recorder
Copper edges up on tighter nearby supply, focus on US-China trade talks
Copper prices edged up in London on Friday, supported by a weaker dollar and tighter nearby supply, reflected in the premium for nearby copper contracts against those further along the maturity hitting a two-and-a-half-year high. Benchmark three-month copper on the London Metal Exchange (LME) rose 0.1% to $9,443 a metric ton by 0955 GMT. U.S. President Donald Trump said on Thursday he expects there to be substantive negotiations between the United States and China on trade this weekend and predicted that punitive U.S. tariffs on Beijing of 145% would likely come down. 'The talks provide potential for the de-escalation but we don't have strong opinions on what can be achieved in the short-term. The sooner they can de-escalate, the better,' said Ben Davis, head of European metals and mining research at RBC Capital Markets. Trade tariffs pose long-term risks to global demand for metals that rely on economic growth. However, the U.S.-China trade conflict and a probe into copper in the U.S. are reducing the short-term availability of the red metal on the Shanghai Futures Exchange (SHFE) and within the LME system by attracting more copper into the COMEX-owned warehouses. Copper buoyed by softer dollar, focus on tariff tensions Copper inventories in SHFE-monitored warehouses fell 9.6% this week. These stocks are down 70% since end-February, deepening the premium of SHFE June copper contracts over the October ones. On the LME, the spread between the cash LME and the three-month copper contract ended Thursday at a premium of $46 a ton, the highest since November 2022. It swung from a discount of $63 in early April as stocks in the LME-registered warehouses continue to see outflows. Indicating robust import demand in top metals consumer China, the Yangshan copper premium is at $102 per ton, the highest since December 2023. 'Consumers in China seem to be confident that their government is going to step in with stimulus to mitigate the tariff impact,' said Davis. China's copper concentrate imports reached a record high in April amid steady imports of unwrought copper and copper products. LME aluminium rose 0.6% to $2,428 a ton, zinc rose 1.1% to $2,647.5, lead added 1.6% to $1,975.5, and nickel was up 1.1% to $15,705, while tin rose 0.1% to $31,760.
Mid East Info
09-05-2025
- Business
- Mid East Info
Copper market navigates tariff uncertainty amid tight global supply - Middle East Business News and Information
Ole Hansen, Head of Commodity Strategy, Saxo Bank The copper market continues to trade within a wide range, with some of the price action being driven by market participants trying to preempt what tariff level, if any, the US Commerce Department eventually will recommend the Trump administration apply on US imports. Just like steel and aluminium, Trump has threatened to impose a 25% duty on all copper imports—a move that could roil the global market for one of the world's most important metals—not least considering a robust demand outlook, recently further enhanced by an energy transition which is expected to increase demand for a key conductor of power towards EVs, AI-related data centres, and cooling as parts of the world continue to get warmer. The tariffs, designed to protect local producers and foster increased US production and refining capacity, would, however, leave US manufacturers paying much more for their metal than rivals overseas. The probe launched in February under Section 232 of the Trade Expansion Act is now expected to be ready within weeks, well ahead of the 270-day deadline, and the eventual announcement is very likely to trigger a major price adjustment in the market—not least in the spread between London and New York copper—which reflects the market's attempt to guess the eventual tariff level. Following a slump in early April to 6%, the spread has been hovering around 15% before declining to a current level around 8.5%. The spread is currently coming down amid strong demand in China, reflected by an ongoing slump in stockpiles monitored by the Shanghai Futures Exchange and the highest premium for imported copper since December 2023. Overall, an ongoing decline in copper stocks monitored by the futures exchanges in London and Shanghai has only been partly offset by a rise in New York, albeit stockpiles there has risen to a six-year high driven by hoarding ahead of the mentioned tariff announcement. China has seen the biggest reduction during the past ten weeks, with SHFE-monitored stockpiles down 67% to just 89 kt. The market worries that the current flow of copper heading towards the US ahead of the tariff announcement will be left stranded there until consumed, thereby exacerbating an already tight global market into the second half of 2025. By Q3 2025, Goldman Sachs estimates 45-60% of global reported copper inventories could be in the US, which accounts for just 6% of global refined demand—leaving the rest of the world with very low stocks of this important transition metal. This tightness, albeit a function of trade dislocation, may in the coming months discourage new short positions driven by trade war-related growth worries from entering the market, thereby limiting the downside to the copper price through 2025. The high-grade copper future has settled into a wide range, with USD 4 per pound having proved to offer support on numerous occasions, while the latest upside spike was mostly related to the tariff probe briefly driving the HG premium over London above 16%. In the short term, the London Metal Exchange (LME) contract offers a better insight into the global supply and demand outlook, which, according to Zijin Mining Investment Shanghai, a unit of China's top copper miner, is currently being underpinned by the mentioned strength in China, where apparent demand growth is running near double-digit levels this year, driven by strong orders from State Grid Corp, the world's single largest buyer of copper, and rising production of copper-intensive goods such as air-conditioning units to electric vehicles.
