Latest News

Copper prices drop due to caution about US-China talks

The copper price fell in London Wednesday, as the market was not expecting a quick outcome from upcoming talks between U.S. officials and Chinese officials after months of increasing trade tensions.

The benchmark three-month copper price on the London Metal Exchange shed 0.9% at $9,456 per metric ton as of 0955 GMT, after reaching $9,582 in the early Asian trading hours.

This weekend, U.S. representatives and Chinese representatives are expected to meet for discussions that could be a first step in resolving the trade war between the two world's largest economies. Import duties have risen above 100%.

"Any sign that the situation is deescalating would be beneficial, and these talks are an attempt to calm the market down." "Making statements without lowering tariffs is not helpful," said Nitesh Sha, commodity strategist at WisdomTree.

We are still in a period of uncertainty about the future of trade policy.

The trade spat, and an investigation into copper in the U.S. that is separate from the trade spat, are reducing the availability of copper in the Shanghai Futures Exchange system (SHFE), and the LME.

Since several months, the premium between the COMEX and LME copper futures has been higher as Washington continues to investigate whether or not it should impose new tariffs on copper imports.

COMEX warehouses saw a rise in inventory as traders shifted copper away from the traditional Asian markets and towards the U.S. The price of a litre of milk has risen by 61% since the end March.

Despite the high levels of supplies to the U.S. the inventories at the LME registered warehouses have increased. The SHFE monitored warehouses have seen a steady outflow of stock and continued outflows. The sharp drop in sales is a sign of a robust Chinese market.

Yangshan Copper Premium It is the highest level since December 2023. The price has increased by 43% since the end of March.

The traders were cautious as well, ahead of the Federal Reserve's interest rate announcement later that day. The markets are indicating that there is little chance of a change in interest rates.

LME aluminium fell 1.2%, to $2 398 per ton. Zinc dropped 0.3%, to $2 625, lead increased 0.5%, to $1 931.50, tin rose 0.1%, to $31,990, and nickel declined 0.4%, to $15,620. (Reporting and editing by Emelia Sithole Matarise; Reporting by Polina Devitt)

(source: Reuters)