METALS-Base metals fall as Trump's reciprocal tariffs boost demand concerns

By Polina Devitt

LONDON, April 3 (Reuters) - Base metals fell in London on Thursday, with copper hitting a one-month low as investors feared the new broad U.S. tariffs would stall global growth and affect industrial demand for metals.

Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) was down 3.3% at $9,378 per metric ton by 1605 GMT, after earlier hitting $9,353, its lowest since March 4.

"Markets are factoring in the negative demand implications of the U.S. reciprocal tariffs and the likely tariff responses from major trading partners. We expect the downtrend to continue at least in the short term," said BNP Paribas analyst David Wilson.

As tariff hikes hit global growth expectations, copper consumption prospects and risk appetite, Citi expects copper to retreat to $8,500 by the third quarter. BNP Paribas expects the same mark during the second quarter.

On Wednesday night, President Donald Trump announced reciprocal tariffs that raise effective import taxes to the highest levels in a century.

These tariffs include additional 34% levies on U.S. imports from China, the world's top metals consumer. China's Foreign Ministry urged the United States to correct its "wrongdoing".

The White House excluded copper, for which the U.S. administration is continuing a separate investigation on possible new tariffs, as well as aluminium and steel, already subject to 25% tariffs.

It also added that other certain minerals that are not available in the U.S. would not be subject to the reciprocal tariffs. These exclusions listed zinc and tin.

Meanwhile, LME aluminium CMAL3 lost 1.5% to $2,453.50 a ton after hitting $2,445, the lowest since September 13.

The contract, which has been falling for 11 consecutive sessions, is also under pressure from selling by Commodity Trading Advisors (CTAs), funds that use computer models to track momentum, said a metals trader.

LME zinc CMZN3 slid 2.4% to $2,713.50 and lead CMPB3 dropped 0.6% to $1,957.50 a ton. Both touched two-month lows. Nickel CMNI3 fell 1.0% to $15,800 after hitting a one-month low.

LME tin CMSN3 was down 1.8% at $37,220. It hit $38,395, its strongest since May 2022, on Wednesday on short-covering amid worries that last week's earthquake in Myanmar would delay the restart of mining and exports from a major tin producing region.

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