Copper extends losses, driven by uncertainties over US tariffs

Copper continued its decline on Monday, extending losses from the previous week, as concerns over potential US tariffs on refined copper persisted and cast doubt on inventory flows fueled by tariffs. The benchmark three-month copper price on the London Metal Exchange dropped 0.20% to $14,212 per metric ton by 0313 GMT, while the Shanghai Futures Exchange's most-traded copper contract fell 0.39% to 108,240 yuan ($16,139.57) per metric ton.

Copper experienced a significant sell-off on Thursday following a Reuters report that the White House had not yet determined whether to impose tariffs on refined copper imports, as officials balanced the impact of higher manufacturing costs against the goal of boosting domestic supply. Analysts at Chinese broker Everbright Futures noted that traders remained focused on the Section 232 tariff decision, which is anticipated on September 28.

Uncertainty surrounding the White House's stance has heightened worries about the inventory arbitrage trade, prompting Everbright Futures to label its outlook for copper "cautious and bearish" in the near term. COMEX copper declined more than 4% last week, while inventories in COMEX warehouses slipped for the first time since mid-June, falling 0.02% from the previous day to 767,504 short tons or 696,268 metric tons.

US exchange stocks had risen steadily due to tariff-driven inflows into the country. Overall, sentiment was weak as Asian equities dropped and oil prices surged more than 2% due to renewed Middle East supply concerns, further fueling inflation worries ahead of upcoming policy meetings by the US Federal Reserve and Bank of Japan.

The broader base metal market also faced pressure, with aluminum up 0.29%, nickel up 0.10%, zinc down 0.53%, lead down 0.74%, and tin falling 0.64%. On the Shanghai Futures Exchange, aluminum declined 0.50%, zinc dropped 1.40%, lead fell 1.79%, nickel lost 0.72%, and tin plummeted 3.04%.