METALS-Copper hits two-week low on tariffs, but China data supports

By Eric Onstad

LONDON, March 31 (Reuters) - Copper prices fell on Monday to their weakest in more than two weeks on worries about new U.S. tariffs due this week, but the losses were cushioned by strong factory data from top metals consumer China.

Benchmark three-month copper CMCU3 on the London Metal Exchange was down 0.9% at $9,704 per metric ton by 1600 GMT, having earlier touched $9,679.50, its lowest since March 12.

U.S. President Donald Trump announced on Sunday the tariffs that he plans to introduce this week will apply to all nations, sending stocks and other financial markets spiraling down. MKTS/GLOB

But data on Monday showed China's manufacturing activity expanded at the fastest pace in a year in March.

"The Chinese data are keeping the market from aggressively giving back some of these recent strong gains. We're still holding at relatively high levels," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

LME copper has gained 11% so far this year while the U.S. Comex market has surged by 27%.

Traders have been buying copper to send to the United States ahead of expected tariffs on the metal, but as those tariffs are due to be imposed in the coming weeks, people are running out of time to make those trades, Hansen added.

U.S. Comex copper futures HGc2 slid 1.9% to $5.03 a lb, sending the premium of Comex over LME down to $1,387 a ton from $1,565 on Friday.

"I think the fact that the arbitrage window has closed, or is closing, brings the risk that the Comex contract could suddenly see significant further weakness," Hansen said.

Tin bucked the downward trend due to fears of supply disruptions from an earthquake in major tin producer Myanmar last Friday.

LME tin CMSN3 jumped 1.5% to $36,755 a ton, having touched its highest since June 2022 at $37,105, while prices on the Shanghai Futures Exchange SSNcv1 rose 0.4%.

Among other metals, LME aluminium CMAL3 fell 0.5% to $2,536 a ton, zinc shed 0.2% to $2,850.50, lead CMPB3 eased 0.7% to $2,012 and nickel CMNI3 slid 2.9% to $15,905.

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