Shanghai copper reverses gains amid trade war fears

Shanghai copper declined on Tuesday as fears over escalating trade tensions between China and the United States outweighed long-standing concerns over mine disruptions and supply shortages.

The most-active copper contract on the Shanghai Futures Exchange closed daytime trading down 0.59% at 84,400 yuan ($11,818.74) per metric ton.

Prices rose in the morning to 86,790 yuan a ton, as hopes for a de-escalation between the world's economic heavyweights grew after U.S. Treasury Secretary Scott Bessent said President Donald Trump remained on track to meet Chinese leader Xi Jinping in South Korea in late October.

But tensions returned in the afternoon following the release of an interview in the Financial Times citing Bessent saying China was trying to damage the global economy. China, meanwhile, said it had also started to collect special port charge on U.S.-linked vessels, a tit-for-tat countermeasure against Trump levying fees on Chinese ships.

"Everyone was focusing on the suddenly-escalated trade tensions in the afternoon, fearful about the uncertainties and backed off from the market," a Chinese copper trader said, requesting anonymity as they were not authorised to speak to the media. Mine disruptions, including the suspension of operations at Grasberg in Indonesia late last month, limited losses amid expectations of a supply deficit in 2026.

The benchmark three-month copper contract on the London Metal Exchange (LME) was down 2.8% at $10.517 a ton, as of 0755 GMT, after a more than 2% gain on Monday.

Among other SHFE base metals, nickel lost 0.64%, lead dipped 0.35%, tin tumbled 0.98%, and aluminium and zinc were little changed.

Among other LME metals, aluminium was down 0.65%, zinc fell 1.13%, nickel dipped 0.27%, lead dropped 0.35%, and tin was down 0.62%.