SHFE copper falls as US tariffs seen hitting China harder

Copper prices on the Shanghai Futures Exchange came under more pressure than those in London on Thursday, with analysts saying China will likely bear the brunt of the United States' decision to implement a 50% copper tariff on imports.

The most-traded copper contract fell on the SHFE HG1! fell for the fifth day since July 4, down 0.39% at 78,600 yuan ($10,952.87) per metric ton by 0708 GMT. It touched 78,190 yuan, the lowest since June 23 earlier on Thursday.

In contrast, three-month copper on the LME HG1! rebounded on Thursday after five days of losses, up 0.36% at $9,665.5 a ton.

The most active COMEX copper futures contract (HGc3) hovered near a record high and its premium against LME copper (LMECMXCUc3) jumped to 26% on Wednesday.

China, the world's largest copper producer, may face a bigger blow from U.S. tariffs on copper, according to SHMET, a metals market research institution.

The tariff move may boost copper shipments to China as some supplies are redirected to countries outside the U.S., a Shanghai-based metals analyst at a futures company said.

She added that COMEX inventories (HG-STX-COMEX), which are at a seven-year high, and rising output from China and the Democratic Republic of Congo could also pressure SHFE prices.

On Thursday, LME nickel NICKEL1! gained 1.14% to $15,150 per ton, tin FTIN1! was up 0.91% at $33,585, zinc ZNC1! rose 0.86% to $2,766, lead LEAD1! advanced 0.49% to $2,066, and aluminium ALI1! gained 0.4% to $2,607.

SHFE nickel NICKEL1! rose 1.41% to 121,140 yuan a ton, zinc ZNC1! was up 1.38% at 22,385 yuan, tin FTIN1! rose 1.2% to 266,740 yuan, aluminium ALI1! was up 0.9% at 20,700 yuan, and lead LEAD1! inched up 0.17% to 17,230 yuan.

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($1 = 7.1762 Chinese yuan)