LONDON — Copper prices slipped on Friday as investors anticipated the 50 percent tariff on the metal due to be imposed on US imports is likely to erode demand, and as speculators unwound positions.
Three-month copper on the London Metal Exchange was 0.4 percent weaker at $9,664 per metric ton by 1600 GMT, down from the three-month peak of $10,020.50 touched on July 2.
The contract was on track to shed about 2 percent this week, a second weekly decline.
“Given that you have this punitive tariff in the US, you will have a dampening impact on demand,” said Carsten Menke, analyst at Julius Baer in Zurich.
“Another element, I think, is position squaring from speculators, who now need to reassess the situation, which had been quite bullish before.”
Menke expects the LME price to head back to $9,000 a ton or below.
Speculators pushed up US copper prices in recent months on expectations of tariffs following an announcement in February of an investigation into duties on imports.
COMEX copper futures hit an all-time peak of $5.90 a lb this week after the 50 percent levy was announced, but on Friday were little changed at $5.59, bringing the premium of COMEX over LME copper to $2,663 a ton, or 27 percent.
COMEX prices have been dragged lower by an inventory overhang after traders shipped roughly a year’s worth of copper to the United States so far this year to beat the tariff, analysts said.
Investors were also grappling with uncertainties, such as which copper products would be included in the tariff and whether certain countries might get exceptions.
The most-traded copper contract on the Shanghai Futures Exchange edged 0.05 percent higher to 78,430 yuan ($10,937.87), but ended the week down 2.05 percent, after a gain of 2.8 percent during the previous two weeks.
