LONDON: Aluminium prices fell on Wednesday as US President Donald Trump said his administration was considering imposing a 10% tariff on Chinese imports from Feb. 1, inflating fears of trade tensions. Three-month aluminium on the London Metal Exchange (LME) was down 0.7% at $2,626.5 a metric ton in official open-outcry trading.
Trump said late on Tuesday that his administration was discussing imposing a 10% tariff on goods imported from China on Feb. 1, the same day that he previously said Mexico and Canada could face levies of around 25%. He also vowed duties on European imports, without providing further details.
A global trade war, if it unfolds, may eventually lead to lower economic growth and lower demand for industrial metals, said Ole Hansen, head of commodity strategy at Saxo Bank. “In the short term, the market will want to know more about the tariffs and China’s response, and only then will we know more about the short- to medium-term impact on demand,” Hansen added.
China’s foreign ministry said on Wednesday Beijing was willing to maintain communication with the US to “properly handle differences and expand mutually beneficial cooperation”. While traders wait to see what portion of the US trade rhetoric becomes real action and what remains negotiating leverage, a broad trade memorandum, which Trump signed on Monday, keeps some room for a measured approach.
With this memorandum, Trump ordered federal agencies to complete comprehensive reviews of a range of trade issues by April 1. LME copper fell 0.5% to $9,242 in official activity after closing at the highest level since Nov. 11 on Tuesday.
Trump reversed some US green energy policies but then unveiled a new artificial intelligence (AI) investment push, leaving longer-term demand prospects for copper, crucial for the energy transition, in the US largely unmoved so far. LME tin was steady at $30,225, nickel fell 1.9% to $15,775, lead gained 0.4% to $1,979 and zinc was down 0.6% at $2,897.
Source: Brecorder
