METALS-Copper jumps as dollar drops on report of limits on US tariffs

Updates prices

LONDON, Jan 6 (Reuters) - Copper prices jumped on Monday as the dollar fell after a report said aides to U.S. President-elect Donald Trump were considering tariffs that would be applied only to critical imports, easing worries about wide-ranging levies that could trigger trade wars.

The Washington Post reported that Trump's aides were exploring plans that would apply tariffs to every country, but only on sectors seen as critical to national or economic security. Trump later denied the report.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 1.3% at $8,994.50 a metric ton at 1700 GMT. Nervousness about the outlook has kept copper in a narrow range around $9,000 since the U.S. election in November.

"The price is being driven by macro factors," said Robert Edwards, analyst at consultancy group CRU, adding that the dollar was one of those factors. "Until anything firm or concrete happens (on U.S. import tariffs), it's difficult to make a judgment on how the market will progress."

A weaker U.S. currency makes dollar-priced metals cheaper for holders of other currencies, which would be positive for demand.

However, gains are expected to be capped by ongoing concerns about demand in top consumer China, where growth and consumption of industrial metals are weak.

The copper market is also focused on tight supplies of concentrate owing to operational issues and disruptions.

"Refined copper output outpaced mine supply in 2023 and 2024 as smelters fed more scrap into the mix and opted to keep running even as margins deteriorated," Morgan Stanley analysts said in a note.

"This may get more challenging to deliver in 2025, as latent scrap in the system is used up, and copper prices are also down significantly from 2024's all-time high."

Global mined copper supplies are estimated at about 24 million tons this year. Copper hit a record high of $11,104.50 last year.

Among other metals, aluminium CMZN3 rose 0.1% to $2,495.50 a ton, zinc CMZN3 added 0.4% to $2,898.50, lead CMPB3 was up 1.3% at $1,946.50, and tin CMSN3 advanced 0.8% to $29,255, while nickel CMNI3 gained 0.5% to $15,185.

(Reporting by Pratima Desai; additional reporting by Violet Li in Shanghai; editing by David Goodman, Mark Potter and Mark Heinrich)

((pratima.desai@thomsonreuters.com))

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