Copper extended a retreat from a nine-month high on speculation that supply dislocations — fueled by the possibility of upcoming U.S. tariffs — may end sooner than had been expected.
After topping US$10,000 earlier in the week, prices fell for a third day in London. That puts them on track for a weekly drop after Bloomberg reported the U.S. administration aims to introduce tariffs on copper imports within weeks, instead of months as had been widely anticipated. A swift implementation would leave little time for traders to divert more metal to the U.S.
Commodities have been jolted this year as investors react to the U.S. administration’s imposition of trade levies, plus the threat of many more curbs to come, including a raft of announcements due next week. U.S. President Donald Trump has ordered a probe into copper flows, ahead of which traders had been racing to shift cargoes to the U.S.
“Copper’s retreating quickly because the arbitrage trade to bring copper to the US is going to end quickly,” said Fan Rui, an analyst at Guoyuan Futures Co. Still, the risk of production cuts in China may limit downside, Fan added.
Copper was 0.2 per cent lower at US$9,827.50 a ton on the London Metal Exchange at 12:44 p.m. local time, after reaching the highest since June on Wednesday.
Among other metals, tin spiked more than 3 per cent on the LME after a 7.7-magnitude earthquake struck Myanmar, a major producer. Details of any damage remained unclear, although media reports suggested several deaths and severe damage to infrastructure.
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