METALS-Hopes of progress in US trade talks lift copper after sharp sell-off

By Polina Devitt

LONDON, May 1 (Reuters) - Copper prices rose in London on Thursday as hopes for progress in U.S. tariff talks with top consumer China and other trading partners provided support to the metal.

Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) was up 1.0% at $9,214 per metric ton by 1601 GMT, attempting to hold above its 21-day moving average of $9,195.

The metal, used in power and construction, fell 3.3% on Wednesday under pressure from a sharper decline in the U.S. Comex copper contract HGc3, weak Chinese factory activity and trade uncertainty amid U.S. import tariffs.

U.S. President Donald Trump said on Wednesday he believed there was a "very good chance" his administration could do a deal with China.

The U.S. has approached China seeking talks over Trump's 145% tariffs, a social media account affiliated with Chinese state media said on Thursday.

"However, uncertainty persists, particularly with the U.S. continuing to review potential tariffs on copper imports and broader concerns around global growth still unresolved," said Neil Welsh, head of metals trading at Britannia Global Markets.

Trading volumes were thin on Thursday with most of Europe's markets also closed for a public holiday and mainland China's markets closed until Tuesday for a five-day holiday.

U.S. manufacturing contracted further in April while tariffs on imported goods were straining supply chains, data showed on Thursday.

Supporting copper in the short term were continuing outflows from inventories in the LME-registered warehouses MCUSTX-TOTAL and a recent sharp decline in stocks in the warehouses monitored by the Shanghai Futures Exchange CU-STX-SGH.

Copper inventories in COMEX-owned warehouses HG-STX-COMEX rose 50% in April as traders redirected the metal to the U.S. from traditional Asian consuming markets to benefit from the COMEX premium over the LME benchmark. LMECMXCUc3

The Yangshan copper premium SMM-CUYP-CN, which reflects demand for copper imported into China, rose 34% in April to $94 per ton, its highest price since late 2023.

However, cash copper CMCU0 is expected to average $9,083 per ton in the third quarter of 2025, a Reuters' poll showed on Wednesday, with analysts raising their forecast of a 2025 market surplus sharply amid fears that volatile U.S. tariff policies would curb growth in China and elsewhere.

Aluminium CMAL3 rose 0.1% to $2,413.50 a ton, zinc CMZN3 fell 0.5% to $2,580, lead CMPB3 was down 0.4% at $1,949, tin CMSN3 slid 4.3% to $30,000 and nickel CMNI3 lost 1.3% to $15,225.

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