METALS-LME copper eases as US tariffs overshadow China stimulus hopes

By Anushree Mukherjee

March 4 (Reuters) - London copper prices eased on Tuesday amid fears of escalating trade tensions as U.S. President Donald Trump slapped tariffs on Canada, Mexico and China, while hopes of stimulus in China helped curb the losses.

Three-month copper on the London Metal Exchange (LME) CMCU3 slipped 0.6% to $9,363.5 a metric ton, as of 0704 GMT. The most-active copper contract on the Shanghai Futures Exchange SCFcv1 lost 0.1% to 76,940 yuan ($10,566) a metric ton.

"Copper in London trades lower amid demand fears after Trump went ahead (with) slapping tariffs on its main trading partners," said Ole Hansen, head of commodity strategy at Saxo Bank.

Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, launching new trade conflicts with the top three U.S. trading partners. In a swift response, China retaliated with new tariffs of its own.

"One variable that could keep price declines in check is the fact that the Chinese National People's Congress kicks off on Wednesday and traders may not want to get too short ahead of this meeting," said Marex consultant Edward Meir.

Traders expect additional stimulus announcements from the National People's Congress meeting. China is the top consumer of base metals.

Meanwhile, JP Morgan expects the global deficit in refined copper to grow to 160,000 metric tons in 2026 and continues to forecast copper prices averaging around $11,000 per metric ton next year.

LME aluminium CMAL3 fell 0.1% to $2,609 a ton, zinc CMZN3 lost 0.6% to $2,826, nickel CMNI3 fell 0.6% to $15,805, tin CMSN3 firmed 0.4% to $31,700 and lead CMPB3 gained 0.1% to $1,993.5.

SHFE aluminium SAFcv1 was steady at 20,630 yuan a ton, zinc SZNcv1 climbed 0.2% to 23,680 yuan, nickel SNIcv1 gained 0.9% to 127,210 yuan and tin SSNcv1 rose 0.5% to 256,800 yuan. Lead SPBcv1 eased 0.1% to 17,220 yuan.

($1 = 7.2816 Chinese yuan renminbi)