METALS-Copper retreats on tariff uncertainty and firmer dollar

By Eric Onstad

LONDON, May 27 (Reuters) - Copper prices lost ground on Tuesday, pressured by a firmer dollar and uncertainty over U.S. tariffs, retreating from their strongest in nearly two weeks after persistent problems at a large mine in Congo.

Three-month copper CMCU3 on the London Metal Exchange was down 0.2% at $9,595.50 a metric ton by 1625 GMT, after hitting its highest since May 14 at $9,640.

"We just don't know which way tariffs will go, how U.S.-European negotiations are going," said WisdomTree commodity strategist Nitesh Shah.

U.S. President Donald Trump's decision to drop his threat to impose 50% tariffs on European Union imports from next month gave new impetus to trade talks, the EU said on Monday.

U.S. Comex copper futures HGc3 slid 2% to $4.74 per lb, bringing the premium over LME copper to $855 a ton.

Also weighing on the market was the firmer dollar .DXY, making dollar-denominated assets more expensive for buyers using other currencies. FRX/

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 was down by 0.08% to 78,210 yuan ($10,878.36) a ton.

In top metals consumer China, end-user demand is gradually slowing and fundamentals could weaken as copper demand approaches its off season, said Chinese consultancy Everbright Futures.

Helping to cap losses in copper was news that Ivanhoe Mines IVN.TO had suspended its output forecast for this year after seismic activity at its giant mine in the Democratic Republic of Congo halted underground mining operations.

The DRC is the biggest copper producer in Africa.

"The suspension at the Kakula copper mine could remove about 150,000 tons of supply if shut for the remainder of the year. This is likely to weigh further on treatment charges and bring upside risk for copper prices," Morgan Stanley analyst Amy Gower said in a note.

Among other LME metals, aluminium CMAL3 climbed 0.9% to $2,484.50 a ton and zinc CMZN3 added 0.1% to $2,704, while lead CMPB3 slipped by 0.4% to $1,983, nickel CMNI3 retreated 1.2% to $15,400 and tin CMSN3 shed 1% to $32,500.

($1 = 7.1895 Chinese yuan)