The mood in financial markets remained nervous after President Donald Trump kicked off a tariff war and continued to cut spending while shaking up decades-old geopolitical relationships. Tariffs of 25% on all US aluminum and steel imports will take effect Wednesday. On Tuesday, Trump said he’d double those levies on shipments coming from Canada before quickly reconsidering.
American manufacturers are already paying much higher prices for aluminum, steel and copper than rival plants overseas — a trend that’s sapping business confidence and stoking worries about inflation even before tariffs kick in.
Goldman Sachs analysts including Eoin Dinsmore expect a 25% tariff on copper imports into the US by the end of this year after Trump ordered a 232 investigation into potential tariffs on national security grounds.
“We forecast the higher US price before actual tariff imposition to result in a 50-100% increase in US copper net imports in the coming months, and a 200,000-300,000-ton rise in US copper inventories by the end of” the third quarter, the analysts said in a note on March 11.
In China, copper cathode inventories in Shanghai and Guangdong extended declines from a peak due to fewer imports, Shanghai Metals Markets said in a note. Major domestic copper rod producers cut run rates last week, even during the traditional peak demand season, after elevated prices suppressed new orders, according to the note.
In a further sign of tepid demand in Asia’s largest economy and the world’s biggest consumer of metals, local copper smelters are shipping the metal abroad to take profits from higher global prices.
In other metal markets, zinc rallied by as much as 2.2% after a spike in orders to withdraw metal from warehouses tracked by the London Metal Exchange.
Copper rose 1.4% to settle at $9,662.50 a ton as of 5:51 p.m. local time. Aluminum climbed 0.3%.