METALS-LME copper rises to two-week high, COMEX hits record peak

By Eric Onstad

LONDON, July 23 (Reuters) - U.S. copper prices hit a record high on Wednesday as the planned date for U.S. tariffs approached, while London levels edged up to their strongest in over two weeks on the back of a U.S.-Japan trade deal.

U.S. COMEX copper futures HGc3 were up 1.8% at $5.82 a lb by 1605 GMT after hitting a peak of $5.93 ahead of the planned August 1 start of 50% tariffs imposed by U.S. President Donald Trump on imports of the metal.

COMEX copper has gained 32% since February, when Trump ordered an investigation into copper tariffs.

Benchmark three-month copper CMCU3 on the London Metal Exchange was up 0.1% at $9,925 a metric ton after earlier touching its strongest price since July 4 at $9,947.

The premium of COMEX over LME copper surged to over $3,100 a ton, a record.

Sentiment was boosted after Trump struck a trade deal with Japan, lifting global share markets. MKTS/GLOB

Metals investors are focused on a potential trade deal with the world's top metals consumer China ahead of a meeting scheduled for next week between U.S. and Chinese officials in Stockholm.

Worries about oversupply, however, weighed on the market, highlighted by data showing the copper market was in a surplus of 272,000 metric tons in the first five months of the year.

Also chipping away support was an overhang of inventories in the U.S. after traders took advantage of the higher COMEX prices.

"We could see ... copper range-trading once the tariffs come into play or possibly even soften," said Nitesh Shah, commodity strategist at WisdomTree.

"The U.S. will be using up all that stockpile of copper before importing new units from abroad and therefore demand may look a little bit weak for that period of inventory rundown."

Aluminium CMAL3 was the worst performing LME metal and the only one to fall on the day, dropping 0.5% to $2,645.50 a ton.

"I think the producers are quite happy to get on and do a lot of forward-selling around these levels," Robert Montefusco, a broker at Sucden Financial, told a webinar.

Among other metals, zinc CMZN3 was little changed at $2,859 a ton, lead CMPB3 gained 0.8% to $2,027.50, nickel CMNI3 added 0.3% to $15,570 and tin CMSN3 jumped 2.3% to $34,700.

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