LME copper prices touched a one-week high on Tuesday, recovering from a sharp retreat in the previous session, after US President Donald Trump delayed tariffs on Canada and Mexico for a month, easing concerns over a potential trade war.
Benchmark copper was up 0.5% at $9,145 a metric ton, as of 0425 GMT, its highest point since Jan. 27. The metal fell to a four-week low on Monday.
The dollar index fell 0.2% on Tuesday, making greenback-priced commodities cheaper for holders of other currencies.
Trump backed away from his threat to impose steep tariffs on Mexico and Canada for a month, but US tariffs on China, the largest consumer of industrial metals, were still due to take effect soon.
He will speak with Chinese President Xi Jinping as soon as this week, setting up a major diplomatic exchange as the world’s two largest economies seek a deal that could avert a broader trade war.
“The focus turns whether the 10% tariff proposed by the US on Chinese imports goes ahead … That’s going to be very impactful for the copper market because of the consequences for Chinese demand,” said Kyle Rodda, senior financial markets analyst at Capital.com.
US companies will look to the Middle East and India for more aluminium and to Chile and Peru for copper in case they have to circumvent tariffs in future. Meanwhile, recent data showed that China’s factory activity grew at a slower pace in January.
The Caixin/S&P Global manufacturing PMI slipped to 50.1 in January from 50.5 the previous month. Three-month aluminium rose 0.1% to $2,625.5.
Tariff war fears push most LME base metals lower
LME zinc gained 0.7% to $2,817.5 a ton, tin was up 0.1% at $29,945, lead climbed 0.2% to $1,949, while nickel lost 0.4% to $15,150.
The Shanghai Futures Exchange is closed for the Lunar New Year holiday.
Markets will resume trade on Wednesday, Feb. 5.
Source: Brecorder
