Copper prices edged down on Thursday as the dollar strengthened and stocks in the Asian warehouses registered with the London Metal Exchange kept on rising in anticipation of a 50% import tariff by the U.S.

Three-month copper prices on the LME HG1! fell 0.2% to $9,620.5 per metric ton in official open-outcry trading as they continued to retreat from the three-month high of $10,020 a ton set in early July.

Some copper previously planned for the U.S. is coming back to the LME system after Washington said last week it would impose a 50% import tariff on copper from August 1.

“LME copper stocks continue to rise as material is rerouted back to the exchange, with the window to ship in time to meet COMEX tariff deadlines quickly closing,” analysts at broker Sucden Financial said.

Available or on-warrant LME copper stocks rose 70% to 110,950 tons since Washington announced its copper tariff plan, highest since April 30, easing concerns about availability of the metal for the nearby supply.

This can be seen in the spread between the cash copper contract against the three-month forward contract (CMCU0-3) swinging to a discount. The discount was last at $50 a ton compared with a premium of $320 three weeks ago.

A lot of uncertainty about the U.S. tariffs remains, with the market waiting for Washington’s executive order to confirm the August 1 deadline, provide the list of the exact copper products the levy would apply to, and speculating about possible exemptions for major copper producing countries.

Adding further pressure on copper, China’s data showed on Wednesday that the country’s refined copper production in June rose 14% year-on-year to a record high.

The dollar was stronger on Thursday as investors assessed U.S. President Donald Trump’s latest comments on Federal Reserve Chair Jerome Powell’s future. A stronger U.S. currency makes dollar-priced metals more expensive for buyers using other currencies.

In other metals, LME tin FTIN1! eased 0.1% to $32,765 a ton in official activity after hitting a 3-week low of $32,575. Tin shipments from Myanmar’s Wa State are expected to resume in the coming months, according to the International Tin Association.

Aluminium fell 0.7% to $2,560.5, zinc ZNC1! and lead (CNPB3) lost 0.2% to $2,706 and $1,973, respectively, while nickel NICKEL1! slipped 0.4% to $14,960.
Source: Reuters