Copper Dips on Trump's Import Tariff Threats
Copper prices declined after US President Donald Trump announced plans to impose tariffs on metal imports, including copper, aluminum, and steel. The move has raised concerns about potential trade wars and supported the dollar's strength.
Trump made the announcement during a speech, threatening tariffs on computer chips and pharmaceuticals to promote domestic manufacturing. Sources indicate that Treasury Secretary Scott Bessent advocates universal tariffs starting at 2.5%, escalating gradually. Trump, however, has indicated he favors tariffs "much bigger."
The rising dollar makes commodities priced in the currency less attractive to buyers, contributing to the modest decline in aluminum and iron ore prices.
While the threat of tariffs has impacted metal prices, sharp losses earlier in the week due to risk aversion and Lunar New Year holidays in China may have dampened the market response.
Canada is expected to be the most affected by the tariffs, accounting for over half of US aluminum imports by value. It is also the second-largest copper supplier to the US and the top steel supplier behind Mexico and South Korea.
Industrial metals have faced pressure due to concerns about a protracted trade conflict that could stifle global growth and weaken demand. In China, factory activity contracted in January, indicating consumer caution, while the property sector shows no signs of a robust recovery.
Copper prices fell 0.5% to $9,049.50 per ton on the London Metal Exchange at 12:24 p.m. in Singapore, extending a 2% drop from Monday. Aluminum and zinc prices also declined by 0.4% and 0.9%, respectively. Iron ore futures in Singapore dipped 0.4% to $103.20 per ton.