(Recasts with analyst comment, updates prices, changes
dateline)
By Eric Onstad
LONDON, March 27 (Reuters) - Copper prices eased on
Thursday after U.S. President Donald Trump announced 25% tariffs
on auto imports, which could dampen metals demand.
Benchmark three-month copper on the London Metal
Exchange (LME) was down 0.9% at $9,840 a metric ton at 1030 GMT,
after touching its highest in nearly 10 months in the previous
session.
Global equity markets slumped, especially automaker stocks,
after Trump late on Wednesday announced the auto tariffs.
"It does seem like that could damage demand for autos and
therefore all the metals that are used in autos. So that's
hurting copper prices and other base metal prices today," said
Nitesh Shah, commodity strategist at WisdomTree.
"We just don't know how quickly new tariffs will be thrown
in ... this causes a lot of uncertainty for the base metal
market."
The expectation of Trump imposing tariffs on copper has led
investors to bid up prices, especially on the U.S. Comex
exchange.
LME copper has gained 12% so far this year, while Comex has
surged 30%.
U.S. Comex copper futures dipped 0.1% to $5.23 a lb,
after hitting a record peak on Wednesday. The premium of Comex
over LME prices was last at $1,694 a ton, or 17%.
"Once there is clarity around tariffs, this will subside as
demand from (the) U.S. will soften and that will weigh on
prices," said ANZ Commodity Strategist Soni Kumari.
Copper on the Shanghai Futures Exchange slid 1.03%
to 81,560 yuan ($11,229.21) a ton.
Citi Research forecast that a 25% U.S. copper import tariff
would be imposed in the second quarter of this year and lowered
its three-month price outlook to $9,500 per ton, down from
$10,000.
Among other metals, LME aluminium fell 1.2% to
$2,575 a ton, lead dropped 1.1% to $2,069, zinc eased
1.5% to $2,911.50, nickel gave up 0.5% to $16,160, tin
dipped 0.1% to $35,055.
($1 = 7.2632 Chinese yuan)