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Market Reacts as Investors Await U.S. Tariff Decision
Copper and aluminium prices rose slightly on Thursday as investors awaited clarity on U.S. President Donald Trump’s potential tariffs on metals. The uncertainty has left base metal markets in a holding pattern, with analysts noting that tariff-related speculation is overshadowing market fundamentals.
As of 1030 GMT, three-month copper on the London Metal Exchange (LME) climbed 0.5% to $9,114 per metric ton, while aluminium rose 0.3% to $2,628 per ton. U.S. Comex copper futures also gained 0.6% to $4.307 per pound ($9,495 per ton), maintaining a premium of $381 over the LME price as investors priced in tariff risks.
Market Sentiment and Tariff Concerns
The base metals market remains highly sensitive to trade policy shifts, with WisdomTree commodity strategist Nitesh Shah commenting, “There’s a lot of noise in the market as traders wait to see what happens with tariffs.”
Trump’s administration has signaled that new tariffs on Canada, Mexico, and potentially China—the world’s largest metals consumer—could take effect as early as Saturday. Analysts at Citi warned that confirmation of these tariffs could trigger a decline in LME base metal prices.
Other Market Drivers: Dollar and EU Sanctions on Russian Aluminium
The U.S. dollar index weakened slightly, providing modest support for base metals. A weaker dollar generally makes commodities cheaper for buyers using other currencies, boosting demand.
Aluminium, which gained 1.8% on Wednesday, stabilized after news broke that the European Union is considering banning Russian aluminium imports as part of new sanctions over the Ukraine conflict. However, uncertainty remains as Hungary may vote against the sanctions, adding another layer of volatility to the aluminium market.
Other Base Metal Movements
- Nickel fell 0.5% to $15,420 per ton
- Zinc rose 0.6% to $2,800 per ton
- Lead edged up 0.3% to $1,965 per ton
- Tin gained 0.3% to $30,185 per ton
Meanwhile, the Shanghai Futures Exchange remains closed for the Lunar New Year holiday, limiting activity in the Asian market.
