Copper up. Markets are looking at the US and Trump's actions

The price of copper in 3-month deliveries on the London Metal Exchange (LME) increases by 0.35%. to USD 12,935 per tonne. Investors are assessing the possibility of introducing tariffs on copper, following information from the Financial Times about a possible reduction in US tariffs on steel and aluminum.

On the Comex in New York, copper increases by 0.38%. and costs $5.8069 per pound.

The Financial Times reported, citing sources, that the US plans to reduce some tariffs on aluminum products and steel. The daily reported that the list of products subject to tariffs is currently being reviewed and some goods will be exempted due to concerns that the tariffs are harming consumers.

Last June, Trump doubled import tariffs on steel and aluminum to 50%. The tariffs have disrupted the global market, limiting supplies to the U.S. and driving up prices there. The cancellation of US tariffs, if confirmed, would ease pressure as imports could be freer.

Jake Lloyd-Smith, an analyst at Bloomberg's Markets Live, estimated that the Financial Times reports may also affect copper prices.

“The conclusion for some traders is that if the administration seeks to correct course on raw material costs in the face of the upcoming election, it may not also introduce tariffs on refined copper. This logic has important consequences, because the latter threat has been a major concern for the market and has contributed to the huge increase in U.S. reserves of this metal,” Lloyd-Smith pointed out.

The most important event for investors on Friday will be the publication of US inflation data for January. The median forecast is for a 2.5% increase in the core consumer price index. on a year-to-year basis.

Investors continue to factor into their valuations about two Fed rate cuts this year, the first of which is expected in June.

“If the inflation data doesn't turn out to be too surprising, I think markets will be quite happy with current valuations. We think the dollar will likely continue to consolidate in the near term,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

“Even a result in line with expectations would indicate a significant slowdown compared to December, which could strengthen sentiment and revive cyclical trading,” said Jose Torres, senior economist at Interactive Brokers.

At the end of the previous session, copper on the LME fell by USD 291 and cost USD 12,876 per tonne. (PAP Business)

kek/ana/