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U.S. Copper tumbles on news of tariffs, LME declines due to tepid Demand

The U.S. Copper prices fell the most in a single day on record, as investors scrambled for positions following a surprise decision by U.S. president Donald Trump to exempt widely traded refined metals from 50% import duties.

Ed Meir, Marex analyst, said that the impact of Trump's announcement was "seismic".

U.S. Comex September copper futures fell 22%, to $4.37 per lb or $9,681 per metric ton by 1130 GMT. They had reached a record high of $5.92 just a week earlier.

After Trump announced in February that he was investigating copper tariffs, U.S. copper prices rose and large volumes of copper were sent to the U.S. to take advantage.

Details released late Wednesday indicated that 50% tariffs will be applied to semifinished copper products excluding copper cathodes, input materials like ores and.

The major copper exchanges trade cathodes - the product of processing copper.

"I imagine it would be a disaster for many people," said Dan Smith.

You spent all that money to get stuff to America, and now it will just sit there.

The benchmark three-month copper price on the London Metal Exchange fell by 0.7% to $9,631 per tonne.

Comex's slide has flipped the premium it had over LME prices, which were trading at around $3,000 per ton last Thursday, into a $4 discount.

LME inventories could be further boosted if LME prices are set at a healthy premium over Comex. The price of has already increased by about 50% in the last month.

JP Morgan stated in a report that "LME stock could rise much faster on direct deliveries from U.S. Copper to U.S. LME Warehouses if there are price differentials."

Smith stated that copper prices will likely remain low in the near term due to seasonal demand.

The Shanghai Futures Exchange's most traded copper contract fell 1.3%, to 78.040 yuan (10,850.95 USD) per ton.

Data showing that the manufacturing activity in China, the world's largest metal consumer, shrank for a 4th month also weighed on prices.

Other metals include LME aluminium, which fell 0.7% to 2,583 per ton. Zinc fell by 0.8%, to $2763.50; nickel dropped 0.4%, to $14960; and lead, down 0.9%, at $1973.50. Tin, however, declined 2.2%, to $32,630.

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(source: Reuters)