Copper prices slip on US tariff exemption for cathodes

Copper prices dipped across major exchanges on Thursday after U.S. President Donald Trump excluded copper cathodes, the most liquid red metal product in the market, from the 50% import tariff on the metal to be implemented on August 1. Three-month copper LME was down 0.77% to $9,623.5 per metric ton by 0740 GMT, while the most-traded copper contract on SHFE eased 1.3% to 78,040 yuan ($10,850.95) a ton.

LME and SHFE copper contracts are priced on copper cathode.

Trump signed a proclamation ordering 50% tariffs on semi-finished copper products and copper-intensive derivative products on Wednesday. He exempted copper cathodes and other input materials such as scrap, ores, concentrates, mattes and anodes.

U.S. September COMEX copper futures plunged 21.66% to $4.376 a lb, or $9,647 per metric ton as of 0740 GMT, resulting in an easing of the premium over the London benchmark to $24 a ton from recent levels above $3,000 a ton.

"SHFE and LME copper prices declined more steeply in Asian afternoon hours, as all the negative news has been adding up, COMEX, U.S. Fed not revising the interest rate yet, and China's stock prices fell too on weak PMI," a Beijing-based analyst said.

China's July PMI showed that manufacturing activity shrank for a fourth month to 49.3 - below the 50-mark separating growth from contraction - a sign that the surge in exports ahead of a U.S. tariff deadline has started to fade.

Stocks in Hong Kong and China led declines after official PMI gauges showed weaker-than-expected economic activity during July.

Among other London metals, aluminium fell 0.63% to $2,584.5 a ton, nickel lost 0.57% to $14,935, lead dipped 0.9% to $1,974, tin edged down 1.93% to $32,715, and zinc eased 0.7% to $2,766.

SHFE aluminium fell 0.53% to 20,510 yuan, nickel lost 1.79% to 119,830 yuan, lead dipped 0.86% to 16,735 yuan, tin eased 0.92% to 265,290 yuan, and zinc slid 1.52% to 22,345 yuan.