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As markets digest US tariffs, copper prices are on the rise

The London Metal Exchange (LME) and Shanghai Futures Exchange (SFE) saw copper prices range-bound on Friday. After an initial shock from the U.S. announcement that a 50% tariff on imports would be effective on August 1, the market was waiting for more details. As of 0101 GMT, the LME's three-month copper was down by 0.18%, at $9,683.5 a metric ton. The contract is down 1.73% this week and could be heading for a second consecutive weekly decline.

The Shanghai Futures Exchange's most traded copper contract edged up 0.18% to 78.530 yuan (10,943.12) but is still on course to finish the week with a loss of 1.97%.

The U.S. president Donald Trump announced a 50% tariff on copper starting on August 1, to promote the domestic development of an important industry for automobiles, electronics and defense.

The futures analyst of a Beijing metals company who requested anonymity said that there were still many unknowns, including what copper products would be included in the plan, whether or not the 50% was final, or if it could be changed, and whether or not the implementation date will be extended.

The COMEX premium was $2,615 per ton in the previous session. This is a 27% drop from the peak reached on Tuesday. Traders have shipped about a full year's worth copper to the United States.

Analysts said that with so much copper shipped to the U.S. already, it may not be possible to implement the tariff as announced. However, an increase of 40% is more likely, even if the tariff was implemented.

Nickel fell 0.2% on Friday to $15,260 and LME lead dropped 0.54%.

SHFE nickel rose by 1.03%, to 121.140 yuan per ton. Zinc was up 0.58%, at 22.415 yuan. Aluminium was up 0.27%, at 20.725 yuan. Tin advanced 0.16%, to 265,430, yuan. Lead eased down 0.73%, to 17.090 yuan.

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(source: Reuters)