METALS-Copper buoyed by hopes of easing US-China trade tensions

By Ashitha Shivaprasad

May 8 (Reuters) - Copper prices rose on Thursday after sentiment was boosted by U.S. President Donald Trump saying he expected import tariffs on Chinese goods to come down, reversing earlier losses triggered by a firmer dollar.

Benchmark copper CMCU3 on the London Metal Exchange (LME) was up 0.2% at $9,439 a metric ton by 1635 GMT.

Traders said Trump's comments raised hopes of easing tensions between the United States and China, the world's top consumer of industrial metals, and helped to buoy copper prices that were also supported by falling inventories.

U.S. Treasury Secretary Scott Bessent and chief trade negotiator Jamieson Greer will meet China's economic tsar He Lifeng in Switzerland at the weekend.

Copper stocks in Shanghai Futures Exchange-monitored warehouses CU-STX-SGH have recently registered massive drops while inventories in COMEX-owned warehouses HG-STX-COMEX were at their highest since late 2018.

"Specific to copper, the dichotomy remains the strength in Chinese copper demand in the here and now versus the street’s bearish macro outlook," said Alastair Munro, senior base metals strategist at broker Marex.

"Amid U.S. tariff expectations, all the metal is being drawn to CME, creating a tight supply situation in other parts of the world," Munro said, adding that the Chinese situation is exacerbated by a shortage of scrap metal.

The Yangshan copper premium SMM-CUYP-CN, a gauge of China's appetite to import copper, is at its highest since December 2023 at $100 a ton.

Copper stocks in LME-registered warehouses MCUSTX-TOTAL, meanwhile, have dropped nearly 30% to 194,275 tons since mid-February and are at their lowest since July last year. Cancelled warrants - metal earmarked for delivery - at 43% suggest LME copper stocks will slide further.

Falling inventories have fuelled worries about copper supplies on the LME market and have created a premium for the cash contract over the three-month forward CMCU0-3.

SP Angel analyst John Meyer said copper had earlier come under pressure from profit-taking but "the market is not taking big positions in this environment".

Overall, the stronger U.S. currency, which makes dollar-priced metals more expensive for holders of other currencies, was weighing on exchange-traded industrial metals.

Aluminium CMAL3 gained 1.1% to $2,409 a ton, zinc CMZN3 advanced 0.5% to $2,630, lead CMPB3 slipped 0.3% to $1,952 and tin CMSN3 gained 1% to $31,955 while nickel CMNI3 firmed by 0.3% to $15,595.