London copper prices saw a slight increase on Tuesday, recovering from earlier losses, thanks to a weaker dollar. However, ongoing concerns regarding U.S. tariff policies and ongoing trade conflicts limited the extent of these gains. As of 0704 GMT, three-month copper on the London Metal Exchange (LME) rose by 0.2%, reaching $9,548 per metric ton.
In contrast, the most-active copper contract on the Shanghai Futures Exchange experienced a decline of 0.5%, settling at 78,030 yuan (approximately $10,772.12) per ton. On Tuesday, investors favored the yen as a safe investment, causing it to hit a five-month high. This move came amid growing fears of a slowdown in U.S. economic growth fueled by tariff-related issues, which have negatively impacted U.S. stocks and the dollar.
A weaker dollar makes dollar-denominated commodities more affordable for buyers using other currencies. Former President Trump refrained from addressing the adverse market reactions resulting from his inconsistent tariff strategies on major trading partners. There are concerns that these erratic policy shifts could push a fragile economy towards recession.
Natalie Scott-Gray, a senior metals analyst at StoneX, highlighted that altered trade routes and potential retaliatory tariffs could lead to economic shocks and uncertainty in investments. She noted that the current economic health of China appears more uncertain than during previous tariff periods. China, being the world’s largest consumer of copper, accounts for about half of annual global copper consumption.
In terms of other metals, LME aluminium dipped slightly by 0.02% to $2,693.5 per ton, while zinc rose by 0.3% to $2,866. Nickel saw a 0.2% increase, reaching $16,580, whereas lead fell by 0.2% to $2,044. Tin, however, edged higher by 0.2% to $32,720.
In the Shanghai market, aluminium and zinc decreased slightly, while nickel saw an approximate 1% increase.