REUTERS/Alexander Manzyuk/File Photo
SHANGHAI: Aluminium price fell on Wednesday amid concerns about the risk of a major global trade war, after U.S. President Donald Trump's imposition of 25% tariffs on steel and aluminium imports.
Three-month aluminium on the London Metal Exchange (LME) was down 0.6% to $2,627.5 a metric ton, as of 0219 GMT, down 1.3% from a three-week high of $2,662.50 hit on Monday when tariffs were announced.
The biggest impact of the tariff imposed on Monday will be on aluminium, used in transport, construction and packaging, with net imports accounting for around 82% of U.S. requirements, according to Morgan Stanley.
The U.S. aluminium premium over the global benchmark on the London Metal Exchange has shot up by a quarter since Friday to 35 cents per pound and has surged by 60% since Trump was elected.
"Volatility in the aluminium market is expected to remain high after Trump announced tariffs on US imports. We expect the U.S. aluminium industries will struggle to avoid the tariffs in the short term, putting upward pressure on prices," ANZ Research said.
While Trump did not impose tariffs on copper, he did threaten duties last week without giving further details.
The LME benchmark copper rose 0.2% to $9,373.5 a metric ton.
Expectations of copper tarrifs propelled the premium of U.S. futures traded on Comex over the global benchmark on the London Metal Exchange to a record peak on Monday.
Among other metals, zinc rose 0.6% to $2,838, tin was up 0.1% to $31,200, lead added 0.3% to $1,985.5 and nickel fell 0.9% at $15,400.
The aluminium contract on the Shanghai Futures Exchange (SHFE) fell 0.5% to 20,570 yuan ($2,814.76) a ton, its highest since early December.
SHFE copper dipped 0.4% to 76,950 yuan, nickel lost 0.8% to 124,450 yuan, zinc was flat at 23,715 yuan, lead shed 0.2% to 17,105 yuan and tin was unchanged at 257,700 yuan. - Reuters
