Copper prices drifted to the lowest in more than a week on Wednesday as inventories climbed and investors worried about looming U.S. tariffs hitting demand.

Three-month copper on the London Metal Exchange HG1! was down 0.6% at $9,736 per metric ton in official open-outcry trading, having touched its weakest since July 18 at $9,720.50.

Investors are staying on the sidelines as they await details about planned U.S. tariffs of 50% on copper and whether they will be imposed on August 1 as announced, analysts said.

U.S. Comex copper futures (HGc3) dipped 0.2% to $5.64 a lb, bringing the premium of Comex over LME copper to $2,694 a ton.

There was also uncertainty about a trade war between the U.S. and China, the world’s biggest metals consumer, after officials of the two biggest economies agreed on Tuesday to seek an extension of their 90-day tariff truce.

“I think investors’ engagement has stalled,” said Tom Price, head of commodities strategy at Panmure Liberum.

“Investors abroad are actually pricing in the demand risk of these tariffs because the metal is suddenly much more expensive with no change to demand. A 50% tariff is a staggeringly huge number.”

The most-traded copper contract on the Shanghai Futures Exchange HG1! dipped 0.1% to 78,930 yuan ($10,999.47) a ton.

Excess supply in the market was showing up in surging inventories in LME-registered warehouses (MCUSTX-TOTAL), which have jumped by 51% over the past month to 136,850 tons, LME data showed.

The market was also waiting for the U.S. central bank’s policy announcement later in the day, when rates are expected to be left unchanged. “If they don’t cut, then I think we will see commodities come under pressure,” Price added.

LME aluminium ALI1! rose 0.3% in official activity to $2,614 a ton, while zinc ZNC1! eased 0.5% to $2,792, lead LEAD1! fell 0.6% to $2,005, nickel NICKEL1! lost 1.5% to $15,080 and tin FTIN1! edged down 0.1% to $33,650.
Source: Reuters