Copper Surges on Softer-Than-Expected Tariffs
September 18 2018 - 3:04PM
Dow Jones News
By Christopher Alessi and Amrith Ramkumar
Copper prices rebounded on Tuesday, surging after the U.S. and
China announced fresh tariffs that were less severe than some
investors had feared.
Front-month copper for September delivery rose 3% to $2.7120 a
pound on the Comex division of the New York Mercantile Exchange,
its largest one-day climb since April 18. Even with the advance,
worries about tariffs slowing the Chinese economy and lowering
commodity consumption have sent prices 18% from their June
four-year highs in recent weeks.
But some analysts said the U.S. applying a 10% duty on Chinese
imports starting Sept. 24 was a more measured response than
expected. Some had projected a 25% duty, but the Trump
administration said the fresh tariffs will only rise to that level
at the end of the year.
Copper prices extended gains after China said it would retaliate
with tariffs ranging from 5% to 10% on $60 billion of U.S. goods,
also going into effect Sept. 24.
Some analysts remain optimistic that the two sides will resolve
their monthslong spat ahead of planned meetings between country
leaders in November. China is the world's largest consumer of
materials, accounting for about half of global copper demand, so
tariffs and signs of a weakening economy have swung industrial
metals prices throughout the year.
Among precious metals, front-month gold for September delivery
edged down 0.2% to $1,196.80 a troy ounce. The dollar's strength
and higher short-term Treasury yields have hurt prices this year,
and analysts are awaiting next week's Federal Reserve meeting to
see how central-bank policy affects the currency and bond markets.
A stronger dollar makes dollar-denominated commodities more
expensive for overseas buyers, while higher bond yields tend to
make gold less attractive to investors.
The gold price "is continuing its slow dance at around $1,200
per ounce, without a clear direction -- investors are already
waiting for next week's Fed meeting, where the board of the U.S.
central bank is expected to hike rates," said Carlo Alberto de
Casa, chief analyst at ActivTrades. "Any comments about the 2019
monetary policy could be a new significant driver for the precious
metal," he added.
Elsewhere in precious metals, most actively traded silver
futures were down 0.3% at $14.185 a troy ounce. Platinum rose 1.7%
to $814.90, and palladium added 2.8% to $1,004.80.
On the London Metal Exchange, aluminum for delivery in three
months added 0.1% to $2,035 a metric ton. Zinc rose 1.3% to $2,349,
tin was down 0.3% at $18,975, nickel rose 1.3% to $12,400 and lead
edged down 0.2% to $2,067.
Write to Christopher Alessi at christopher.alessi@wsj.com and
Amrith Ramkumar at amrith.ramkumar@wsj.com
(END) Dow Jones Newswires
September 18, 2018 14:49 ET (18:49 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.