LONDON (Reuters) -An indicator of copper import demand in top consumer China jumped 38% on Wednesday, suggesting robust appetite for the metal, after U.S. President Donald Trump’s plans for a 50% import tariff drove down benchmark prices in London.
The levy, according to U.S. Commerce Secretary Howard Lutnick, is likely to be in place by August 1. Analysts and traders said that only cargoes already on the water or travelling from Latin America were likely to arrive in the United States before the tariff takes effect.
The Yangshan copper premium rose to $40 a metric ton on Wednesday, up from Tuesday’s 11-month low of $29.
The increase in the premium is because of expected weakness on the London Metal Exchange, said Anant Jatia, founder of Greenland Investment Management, a hedge fund specialising in commodity arbitrage trading.
“A lot of copper bound for the U.S. will not make it before the tariff implementation date and find itself flowing back to the LME,” he said.
The LME copper contract was last down 1.5% at $9,645 a ton. [MET/L]
Also supporting the Yangshan premium was uncertainty over Washington’s plans for U.S. copper scrap exports. The U.S. is the top source of copper scrap for China, though Chinese buyers have been reducing imports from the country since Trump won the U.S. election in November.
(Reporting by Polina DevittEditing by David Goodman)
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