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LONDON, July 29 (Reuters) – Copper prices fell on Tuesday as traders awaited the outcome of U.S. trade talks with Chile and China for more clarity about a U.S. plan to impose a 50% import tariff on the metal from August 1.
The three-month copper contract on the London Metal Exchange was down 0.1% at $9,783.50 per metric ton by 1006 GMT.
“With the August 1 date looming, there remains market uncertainty around what forms of copper will be covered, and if there will be any carve-outs for key suppliers such as Chile which would blunt the impact,” said Standard Chartered analyst Sudakshina Unnikrishnan.
The premium of the most active COMEX copper futures over the LME benchmark fell to 26% from last week’s 30% after Chile, the world’s top supplier of the metal, said the U.S. copper tariffs would be discussed within broader trade talks in Washington this week.
Providing another layer of uncertainty, top U.S. and Chinese economic officials have been in Stockholm since Monday to resolve trade disputes between the world’s top two economies, and to extend a truce by three months. China is the world’s largest metals consumer.
The European Union and the U.S. will develop a metals alliance to mitigate the impact of subsidised Chinese production on global markets as part of their trade deal, European Trade Commissioner Maros Sefcovic said on Monday.
According to Sefcovic, the system is yet to be finalised, but EU steel and aluminium makers would be granted a quota system with minimal or zero tariffs to replace U.S. President Donald Trump’s 50% import tariffs.
Among other LME metals, aluminium slid 0.8% to $2,610.50 a ton, while zinc and nickel fell 0.5% to $2,803 and $15,190, respectively. Lead eased 0.2% to $2,013 and tin lost 0.1% to $33,610. (Reporting by Polina Devitt; Editing by Jan Harvey)
