Copper prices held firm on Tuesday, supported by a lower dollar while gains were capped by worries about economic slowdown and demand growth caused by U.S. President Donald Trump’s tariffs and rising inventories, traders said.

Benchmark copper HG1! on the London Metal Exchange (LME) traded 0.2% higher at $9,845 a metric ton in official rings, moving towards the three-month high of $10,020.50 a ton hit last week.

The sliding U.S. currency has made dollar-priced metals cheaper, potentially boosting demand for industrial metals and copper.

The United States sent formal notices to 14 countries on Monday announcing new tariffs ranging from 25% to 40%, set to take effect on August 1, postponed from July 9.

Trump also warned an extra 10% tariff could be imposed on BRICS nations including Brazil, Russia, India and China if they pursue what he described as “anti-American” policies during their summit in Brazil.

Also weighing on the market was appetite for importing copper in top consumer China as seen in the Yangshan copper premium (SMM-CUYP-CN) at $29 a ton on Monday, down from $103 a ton in early May, when it hit the highest since December 2023.

Stocks of copper (MCUSTX-TOTAL) in LME-registered warehouses were at 102,500 tons, having climbed 13% or 11,875 tons since June 27 and easing concern about availability on the LME market. But traders say deliveries need to be larger.

Cancelled warrants for metal earmarked for delivery at 36% indicate another 37,100 tons of copper are due to leave the LME system and large warrant holdings (0#LME-WHL), (0#LME-WHC) are still dominating trading in nearby contracts.

The premium for buying copper tomorrow and selling it the day after – known as tom-next – has flared out to $13 a ton (MCUT-0=LX) ahead of settlement next week, when short position holders will have to cut or rollover their contracts to sell.

Meanwhile, aluminium inventories (MALSTX-TOTAL) in LME storage have risen 47,450 tons to 384,350 tons since June 25 and helped reverse the premium for the cash over the three-month forward into a discount (CMAL0-3).

Three-month aluminium (CMAL0-3) rose 0.4% to $2,585, zinc ZNC1! gained 1.1% to $2,715.5, lead LEAD1! was up 0.8% at $2,054, tin FTIN1! added 0.6% to $33,500 and nickel slipped 0.3% to $15,125 a ton.
Source: Reuters