METALS-Copper prices slip on US tariff exemption for cathodes

By Lucas Liew

SINGAPORE, July 31 (Reuters) - Copper prices dipped across major exchanges on Thursday after U.S. President Donald Trump excluded copper cathodes, the most liquid red metal product in the market, from the 50% import tariff on the metal to be effective on August 1.

Three-month copper LME CMCU3 was down 0.08% to $9,691 per metric ton by 0330 GMT, while the most-traded copper contract on SHFE SCFcv1 eased 0.82% to 78,420 yuan ($10,902.57) a ton.

LME and SHFE copper contracts are priced on copper cathode.

Trump on Wednesday signed a proclamation ordering 50% tariffs on semi-finished copper products and copper-intensive derivative products as of August 1. He exempted copper cathodes and other red metal input materials such as scrap, ores, concentrates, mattes and anodes.

U.S. September COMEX copper futures plunged 20.43% to $4.445 a lb, or $9,799 per metric ton as of 0330 GMT, and the premium over the London benchmark, thus, eased to $108 a ton from recent levels above $3,000 a ton.

"COMEX copper prices will be under greater pressure, with the decline already evident, and copper prices in Shanghai and London will feel the stress too especially when the premium of COMEX against LME is flat," a Beijing-based metals analyst at a futures company said.

"China's PMI impact on copper has paled in comparison unless it is way below market expectation."

China's July PMI showed that manufacturing activity shrank for a fourth month to 49.3, or below the 50-mark separating growth from contraction, a sign that the surge in exports ahead of a U.S. tariff deadline has started to fade.

Among other London metals, aluminium CMAL3 fell 0.21% to $2,595.5 a ton, nickel CMNI3 lost 0.11% to $15,005, lead CMPB3 dipped 0.5% to $1,982, tin CMSN3 edged down 0.04% to $33,345, and zinc CMZN3 eased 0.54% to $2,770.5.

SHFE aluminium SAFcv1 fell 0.29% to 20,560 yuan, nickel SNIcv1 lost 1.68% to 119,970 yuan, lead SPBcv1 dipped 0.68% to 16,765 yuan, tin SSNcv1 eased 0.75% to 265,740 yuan, and zinc SZNcv1 slid 1.43% to 22,365 yuan.

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