Aluminium and copper prices were little changed on Thursday as markets continued to assess the impact of U.S. President Donald Trump’s decision to impose 25% tariffs on steel and aluminium imports from March 12.
Three-month aluminium on the London Metal Exchange (LME) was down 0.2% at $2,616 a metric ton by 1049 GMT, while copper edged up 0.2% to $9,475.50.
More than a half of aluminium used in the U.S. is imported, with the vast majority coming from Canada. Much of the Canadian supply comes from Quebec, whose Premier Francois Legault on Wednesday said that Canada should consider export tariffs on products like aluminium “where they really need us”.
Copper has not been affected by any U.S. decisions so far, but as Trump promised tariffs on the metal in late January, the premium for U.S. Comex copper futures over the LME contract rocketed to a record high earlier this week.
The proclamations on the 25% steel and aluminium tariffs this week were extensions of Trump’s previous 2018 Section 232 tariffs aimed at protecting domestic steel and aluminium makers on national security grounds.
“Implicitly, the same mechanism could not be used to apply tariffs to other commodities in short order, as it would first require a related investigation by the Department of Commerce,” Marcus Garvey, head of commodities strategy at Macquarie, said in a note.
“This suggests recent volatility in the CME-LME copper spread … is likely to have been excessive, albeit prices remain vulnerable to either blanket tariffs or country specific tariffs that would impact a large portion of U.S. imports,” he added.
Last week, Trump delayed a 25% tariff on goods from Mexico and Canada until March to allow negotiations over steps to secure U.S. borders and halt the flow of the drug fentanyl.
LME zinc fell 0.2% to $2,857.50 a ton, lead rose 0.7% to $1,987 and tin was up 0.5% at $31,640.
(Reporting by Polina Devitt in London; additional reporting by Violet Li; Editing by Kirsten Donovan)