METALS-Copper skids to more than one-week low on tariff, demand worries

By Eric Onstad

LONDON, July 30 (Reuters) - Copper prices dropped to the lowest in more than a week on Wednesday as inventories climbed and investors worried about looming U.S. tariffs hitting demand.

Three-month copper on the London Metal Exchange CMCU3 was down 0.8% at $9,715.50 per metric ton by 1620 GMT, its weakest since July 18.

A stronger dollar .DXY following upbeat data on U.S. economic growth also weighed on prices, making commodities priced in the U.S. currency more expensive for buyers using other currencies. FRX/

Investors are staying on the sidelines as they await details about planned U.S. tariffs of 50% on copper and whether they will be imposed on August 1 as announced, analysts said.

U.S. Comex copper futures HGc3 dropped 0.9% to $5.60 a lb, bringing the premium of Comex over LME copper to $2,619 a ton.

There was also uncertainty about a trade war between the U.S. and China, the world's biggest metals consumer, after officials of the two biggest economies agreed on Tuesday to seek an extension of their 90-day tariff truce.

"I think investors' engagement has stalled," said Tom Price, head of commodities strategy at Panmure Liberum.

"Investors abroad are actually pricing in the demand risk of these tariffs because the metal is suddenly much more expensive with no change to demand. A 50% tariff is a staggeringly huge number."

The most-traded copper contract on the Shanghai Futures Exchange SCFcv1 dipped 0.1% to 78,930 yuan ($10,999.47) a ton.

Excess supply in the market was showing up in surging inventories in LME-registered warehouses MCUSTX-TOTAL, which have jumped by 51% over the past month to 136,850 tons, LME data showed.

The market was also waiting for the U.S. central bank's policy announcement later in the day, when rates are expected to be left unchanged. "If they don't cut, then I think we will see commodities come under pressure," Price added.

LME aluminium CMAL3 dipped 0.1% to $2,603 a ton, zinc CMZN3 eased 0.5% to $2,791, lead CMPB3 fell 1.1% to $1,993.50, nickel CMNI3 slumped 1.8% to $15,045 and tin CMSN3 shed 1.1% to $33,325.

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