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U.S. Copper stabilises and retains a premium over the global benchmark

The U.S. Copper prices stabilized on Friday, after the largest one-day drop in history the day before. Market participants continued to evaluate a surprise decision by U.S. president Donald Trump to exempt refined metal from import tariffs of 50%.

After a 22% plunge on Thursday, U.S. Comex September copper futures last rose 0.8% to $4.391 per lb or $9,680.5 per metric tonne.

In official open-outcry trade, the benchmark three-month price of copper at the London Metal Exchange dropped by 0.2% to $9.592 per ton.

The price pressure is being applied by the rising stock in LME registered warehouses, and the possibility of further inflows after Washington removed refined copper from tariffs.

Comex warehouses have copper stocks After a 176% increase between March and July, the number of short tons (257,915 metric tons) is at its highest level in 21 years.

Stocks of LME available In July, however, the number of metric tons produced by more than doubled, reaching a record high for a period of three months at 127,475 tonnes.

Even with the price drops this week, the Comex premium on copper futures over the LME price limits the possibility of massive outflows in U.S. stock markets.

Metals traders said that the Comex copper premium was now just a few hundred bucks, which was still a huge amount historically, but not as much as the $3,000 premium of recent years.

A private sector survey, which showed a decline in Chinese factory activity for July, added another layer of pressure to the metal.

China, which is the top metal consumer in the world, has until August 12 to reach an agreement on tariffs with Trump's Administration.

Trump imposed steep duties on the exports of dozens of trading partner countries, including Canada. Brazil, India, and Taiwan. The deadline for a trade agreement was Friday.

Other LME metals include aluminium, which fell by 0.7% in official trading to $2.546 per ton, zinc, which dropped 1.7% to 2,714.5, and lead, down 0.4% at $1.963, while tin climbed 1% to $33,050, and nickel, which declined 0.8% to 14,810. (Reporting and editing by David Goodman.)

(source: Reuters)