METALS-Aluminium eases on Trump tariff worries

Reuters
12 Feb
METALS-Aluminium eases on Trump tariff worries

SHANGHAI, Feb 12 (Reuters) - Aluminium price fell on Wednesday amid concerns about the risk of a major global trade war, after U.S. President Donald Trump's imposition of 25% tariffs on steel and aluminium imports.

Three-month aluminium CMAL3 on the London Metal Exchange $(LME.UK)$ was down 0.6% to $2,627.5 a metric ton, as of 0219 GMT, down 1.3% from a three-week high of $2,662.50 hit on Monday when tariffs were announced.

The biggest impact of the tariff imposed on Monday will be on aluminium, used in transport, construction and packaging, with net imports accounting for around 82% of U.S. requirements, according to Morgan Stanley.

The U.S. aluminium premium AUPc2 over the global benchmark on the London Metal Exchange CMAL3 has shot up by a quarter since Friday to 35 cents per pound and has surged by 60% since Trump was elected.

"Volatility in the aluminium market is expected to remain high after Trump announced tariffs on US imports. We expect the U.S. aluminium industries will struggle to avoid the tariffs in the short term, putting upward pressure on prices," ANZ Research said.

While Trump did not impose tariffs on copper, he did threaten duties last week without giving further details.

The LME benchmark copper CMCU3 rose 0.2% to $9,373.5 a metric ton.

Expectations of copper tarrifs propelled the premium of U.S. futures traded on Comex HGc2 over the global benchmark on the London Metal Exchange CMCU3 to a record peak on Monday.

Among other metals, zinc CMZN3 rose 0.6% to $2,838, tin CMSN3 was up 0.1% to $31,200, lead CMPB3 added 0.3% to $1,985.5 and nickel CMNI3 fell 0.9% at $15,400.

The aluminium contract on the Shanghai Futures Exchange (SHFE) SAFcv1 fell 0.5% to 20,570 yuan ($2,814.76) a ton, its highest since early December.

SHFE copper SCFcv1 dipped 0.4% to 76,950 yuan, nickel SNIcv1 lost 0.8% to 124,450 yuan, zinc SZNcv1 was flat at 23,715 yuan, lead SPBcv1 shed 0.2% to 17,105 yuan and tin SSNcv1 was unchanged at 257,700 yuan.

($1 = 7.3079 yuan)

(Reporting by Violet Li and Mei Mei Chu; Additional reporting by Eric Onstad; Editing by Rashmi Aich)

((Violet.Li@thomsonreuters.com;))

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