Copper prices mixed as US tariff exemption sparks market readjustment

Copper prices were mixed on Friday as investors readjusted to a decision by the United States to exempt refined copper from a proposed 50% tariff. Three-month copper on the London Metal Exchange edged up 0.15% to $9,625.5 per metric ton by 0708 GMT. It is, however, down 1.47% so far this week.

The most-traded copper contract on the Shanghai Futures Exchange dipped 0.05% to 78,400 yuan ($10,873.79) a ton and ended the week 1.34% lower.

The copper market is still adjusting after U.S. President Donald Trump said refined copper would not be part of the planned 50% tariff. The exemption has almost eliminated the premium of COMEX over the LME, ANZ analysts said in a note.

"There is a real risk that some copper sitting in COMEX warehouses will be re-exported to international markets, putting downward pressure on copper prices."

COMEX copper prices dropped more than 20% in an hour on Wednesday, triggering a temporary trading suspension.

Analysts warned that if LME copper continues to trade at a premium over COMEX, it could encourage further increases in copper stockpiles, which have surged by about 50% in July.

On the supply side, copper output in top producer Chile fell 6% year-on-year in June, while demand concerns lingered as China's manufacturing activity contracted in July. New export orders in China declined for a fourth consecutive month, while falling production forced factories to cut jobs during the period.

Among other London metals, aluminium gained 0.29% to $2,572.5 a ton, nickel climbed 0.03% to $14,940, and tin rose 0.57% to $32,895. Lead declined 0.18% to $1,967 and zinc eased 0.6% to $2,744.

SHFE aluminium lost 0.29% to 20,510 yuan, nickel fell 0.59% to 119,770 yuan, lead eased 0.45% to 16,735 yuan, tin dipped 0.45% to 264,950 yuan, and zinc fell 0.53% to 22,320 yuan.