LONDON: Copper prices retreated on Thursday as investors locked in profits from a recent rally, awaiting further clarity on tariffs threatened by US President Donald Trump and stimulus for top metals consumer China.
Three-month copper on the London Metal Exchange (LME) shed 0.5% to $9,177 a metric ton in official open-outcry trading. LME copper had gained 6% during January until Monday, when it touched its highest in a month. “I think what we’re seeing is a bit of profit taking, a consolidation of the recent rally,” said Dan Smith, head of research at Amalgamated Metal Trading.
Financial markets were awaiting details after Trump said he could impose a 10% tariff on imports from China from Feb. 1, the same day he previously said Mexico and Canada would face levies of about 25%. Smith said the pullback would probably be short-lived and he was optimistic about copper and other base metals this year.
“I’m pretty bullish about the year ahead. You get an awful lot of noise, which raises short-term volatility, but the overall track record from Trump (from his first term) is actually quite favourable,” Smith said.
He added that AMT’s model for copper, which seeks to replicate algorithmic trading patterns used by computer-driven funds, is likely to flip to bearish from bullish today in the short term, largely owing to fading momentum.
The most active copper contract on the Shanghai Futures Exchange eased by 0.8% to 74,960 yuan ($10,291.76) a ton by the close of afternoon trade in Asia. Also weighing on the market was a firmer dollar, making commodities priced in the US currency more expensive for buyers using other currencies.
Among other metals, LME aluminium dropped 0.7% to $2,615 a ton, nickel lost 0.4% to $15,660, zinc was down 1.2% at $2,864 while lead retreated 0.4% to $1,959 and tin slipped 0.8% to $30,040.
Source: Brecorder
