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Copper prices rise as the market prepares for possible Trump tariffs

Prices of copper rose on Monday, as traders purchased to ship to the United States. President Donald Trump has threatened to impose tariffs against imports of this industrial metal.

The benchmark copper price on the London Metal Exchange was $1,017 per metric ton, up 1.6%, at 1110 GMT, after reaching $10,042 during early trading. It reached $10,046.50 last week for its highest level since October 3.

Copper prices on COMEX meanwhile jumped to an all-time high of $5.1845 a lb or about $11,430 per ton.

The inventories of warehouses around the world that are part of the LME network show the movement in copper from the LME to the United States.

Over the last four weeks, copper stocks at LME warehouses dropped 18% to 221 775 tons. Metal earmarked for shipment is at 50%, which means 111,000 more tons are due to leave LME's warehouses.

Last month, Trump ordered a probe into possible new tariffs on imports of copper to rebuild U.S. manufacturing. Copper is a critical metal for electric vehicles, military equipment, the power grid, and many consumer products.

Trump's tariffs aim to encourage the local production of metal. However, permits for these operations can be difficult to get and smelter building can take many years.

Tom Price, Liberum analyst, said that the policy was designed to encourage investment in US industrial base. This would boost local production and capacity for conversion.

In a few years, perhaps the industry will respond. It has no other choice than to import these metals and accept or pass on the new tariff costs.

The traders said that the Bloomberg report that commodity trader Mercuria estimated that 500,000 tonnes of copper were heading to the United States also drove up prices.

Base metal prices were also driven up by a weaker dollar, which made metals priced in dollars cheaper for buyers using other currencies.

Aluminium rose 0.3%, to $2.630 per ton. Zinc gained 1.6%, to $2.974, while lead increased 2.2%, to $2.061. Tin firmed up by 0.3%, to $34,600, and nickel added 0.7%, to $16,165.

(source: Reuters)