LONDON: Copper prices eased on Friday as a stronger dollar and uncertainty about demand overshadowed optimism that the United States and China were seeking to restrain their trade war.
Benchmark copper on the London Metal Exchange (LME) traded 0.3% lower at $9,365 a metric ton in official rings. The metal hit a peak of $9,481.50 earlier in the week, its highest since April 3, and was headed for a weekly gain.
News on Friday that China has granted some exemptions on U.S. imports from its 125% tariffs and is asking businesses to identify goods that could be eligible.
Earlier in the week, U.S. Treasury Secretary Scott Bessent said that high tariffs between the two countries were not sustainable.
“It’s hard to know exactly where we’re going with this trade war. Clearly, there is a negotiation, but it’s not an easy negotiation,” said Nitesh Shah, commodity strategist at WisdomTree.
“In the short term, we just don’t know how much demand destruction comes as a result of the trade war. So, I’m not so surprised we’re having a bit of a down day.”
Copper inventories in warehouses monitored by SHFE tumbled by 32% over the week, the exchange said on Friday.
Copper gains on softer dollar capped by tariff uncertainty
The steep drop was driven by consumers pulling out stocks they’d bought several weeks earlier when copper prices fell dramatically after President Donald Trump imposed new tariffs, according to two traders.
Reuters reported on Thursday that sharp declines in SHFE stocks were sparking fears of a short squeeze.
Weighing on the metals market was a jump in the dollar , fuelled by the signs of easing tariff tensions, which makes dollar-priced commodities more expensive for buyers using other currencies.
In other metals, aluminium was down 0.2% to $2,443 a ton, zinc slipped 1.4% to $2,650, lead firmed 0.1% to $1,962, nickel eased 0.7% at $15,710 while tin gained 1.4% to $32,195.
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