METALS-US copper futures surge as tariff fears loom

By Ashitha Shivaprasad

June 2 (Reuters) - U.S. copper futures jumped on Monday, widening their premium over London prices, amid speculation about possible new import tariffs after U.S. President Donald Trump said he would double tariffs on aluminium and steel imports to 50%.

The most active U.S. Comex copper futures HGc2 hit $4.9495, the highest since April 3, and were last up 4.0% at $4.8625 a pound. Benchmark three-month copper on the London Metal Exchange (LME) CMCU3 rose 1.2% to $9,607 per metric ton by 1600 GMT.

"Although copper wasn't even mentioned in Trump's latest announcement, markets are clearly pricing in the risk of import tariffs following the February investigation," said Panmure Liberum analyst Tom Price, referring to Washington's ongoing probe into possible new tariffs on copper imports.

The premium on COMEX copper over the LME price, a global benchmark, widened to $1,113 per ton from $772 on Friday. 0#LMECMXCU:

"For now, the COMEX premium is likely to continue pulling material to the U.S., drawing down ex-U.S. inventories and keeping ex-U.S. markets tight," Morgan Stanley said in a note. It estimates that around 200,000 tons of additional material were imported to the U.S. in the last eight weeks.

Copper stocks in the LME-registered warehouses MCUSTX-TOTAL are down 45% since mid-February at 148,450 tons, lowest in almost a year.

Indicating worries about nearby supply in the LME system, the spread between the cash LME and the three-month copper contract CMCU0-3 hit a premium of $51.57 a ton, highest since November 2022, last week. The premium was last at $46 on Monday.

Making dollar-priced metals more attractive for buyers using other currencies, the U.S. currency extended losses on Monday after data showed U.S. manufacturing contracted for a third straight month in May.

In top metals consumer China, where markets will open on Tuesday after the Dragon Boat holiday, data showed the country's manufacturing activity contracted in May for a second month.

LME aluminium CMAL3 rose 1.2% to $2,473 a ton, while the aluminium premium for U.S. buyers soared, reacting to Trump's plan to double the import tariff.

LME lead CMPB3 climbed 1.2% to $1,980.50, zinc CMZN3 gained 3.1% to $2,700, tin CMSN3 added 0.8% at $30,550 and nickel CMNI3 rose 1.8% to $15,500.

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