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METALS-Copper slips on Trump auto tariffs, uncertainty

ReutersMar 27, 2025 5:15 PM

By Eric Onstad

- Copper prices eased on Thursday after U.S. President Donald Trump announced 25% tariffs on auto imports, which could dampen metals demand.

Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.8% at $9,846 a metric ton at 1700 GMT, after touching its highest in nearly 10 months in the previous session.

Global equity markets fell, with auto stocks in a tailspin, after Trump announced the auto tariffs late on Wednesday. MKTS/GLOB

"It does seem like that could damage demand for autos and therefore all the metals that are used in autos. So that's hurting copper prices and other base metal prices today," said Nitesh Shah, commodity strategist at WisdomTree.

"We just don't know how quickly new tariffs will be thrown in ... this causes a lot of uncertainty for the base metal market."

The expectation of Trump imposing tariffs on copper has led investors to bid up prices, especially on the U.S. Comex exchange.

LME copper has gained 12% so far this year, while Comex has surged 30%.

U.S. Comex copper futures HGc3 eased 2.4% to $5.12 a lb, after hitting a record peak on Wednesday. The premium of Comex over LME prices eased to $1,437 a ton, or nearly 15%.

"Once there is clarity around tariffs, this will subside as demand from (the) U.S. will soften and that will weigh on prices," said ANZ Commodity Strategist Soni Kumari.

Citi Research forecast that a 25% U.S. copper import tariff would be imposed in the second quarter of this year and lowered its three-month price outlook to $9,500 per ton, down from $10,000.

Helping to cushion the losses was a weaker dollar index .DXY, which makes commodities priced in the U.S. currency less expensive for buyers using other currencies.

Tin CMSN3 was the best performing LME metal, adding 0.7% to $35,305 a ton. The International Tin Association said on Thursday about 16% of global mine supply is offline.

"Given these feedstock constraints, China's refined production will struggle to match last year's output in 2025," it said.

Among other metals, LME aluminium CMAL3 fell 1.6% to $2,565 a ton, lead CMPB3 dropped 2.3% to $2,044, zinc slumped 2% to $2,898.50 and nickel CMNI3 dipped 0.1% to $16,235.

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