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Copper prices fall after Trump announces steep import tariffs of 50%

The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw a drop in copper prices on Wednesday. Traders may have not had enough time to send much to the United States after Trump's announcement on Tuesday of a 50% tariff on imported copper.

The LME's three-month copper fell by 0.57%, to $9,735 a metric ton, at 0109 GMT. On the SHFE, the most traded copper contract dropped by 0.49%, to 79.090 yuan per ton.

U.S. President Donald Trump announced he would announce a 50% duty on copper on February 2, hoping to boost U.S. manufacturing of a critical metal for electric vehicles, military equipment, power grids, and many consumer products. U.S. Comex Copper futures then jumped over 12%, reaching a new record high.

U.S. commerce secretary Howard Lutnick stated that the tariffs on copper would be likely implemented by the end or August 1st.

A metal analyst in Beijing from a futures firm said: "The announcement was like a thunderous boom in the middle night. It came out very suddenly, and the 50% tariff was much higher than expected."

Analysts expect that the COMEX/LME premium will continue to rise, possibly to $3,000 per ton in the next few days to reflect the tariff of 50%. However, the window for shipment to the U.S.A. could be extremely tight if traders rush to ship copper there.

The analyst in Beijing said that the current pressure on LME and SHFE could result in a higher premium through higher COMEX or lower LME prices.

LME nickel dropped 0.18% at $15,015 per ton. Lead fell 0.17% at $2,053, tin rose 0.31%, to $33,500. Zinc increased 0.29% to $2728.5. Aluminium edged up 0.23% to $2592.

SHFE nickel dropped 1.04% to an average of 119,340 Yuan per ton. Lead rose 0.85% to 17,260 Yuan. Zinc increased 0.52% at 22,120 Yuan. Aluminium increased 0.22% at 20,540 Yuan. Tin was up 0.2%, to 264 780 Yuan.

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(source: Reuters)