(Bloomberg) -- Copper will hit $10,000 a ton in London during the coming three months, according to Citigroup Inc., which said the global market will remain tight until the timeline for US import tariffs becomes clearer.
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The metal climbed in recent weeks after President Donald Trump ordered a probe into copper imports, sparking a rally in US prices and a rush to ship metal there ahead of any levies. The global benchmark price set on the London Metal Exchange closed at $9,770 a ton Wednesday, while futures in New York already are trading comfortably above $10,000 a ton.
“We think ex-US physical market tightening is likely to persist through to May/June, temporarily offsetting price headwinds from broader US tariff announcements,” Citigroup analysts, including Max Layton, wrote in an emailed note.
Industrial metals have held up reasonably well despite growing fears for the US economy as Trump upends trade policy. Copper has also been underpinned by a scarcity of raw materials as demand from smelters grows faster than the world’s mines can expand.
Copper was down 0.3% to $9,737 a ton on the LME at 12:33 p.m. local time, trimming its advance this year to 11%. In New York, Comex copper futures were little changed at about $4.84 a pound, or $10,670 a ton.
In China, authorities issued more licenses for exports as smelters in the world’s top producer face deepening losses amid fierce competition for copper concentrate. Processing fees have deepened a slump below zero.
Trump’s revamped Section 232 tariffs on steel and aluminum came into force Wednesday, sparking retaliation from the European Union and Canada. Trump has made clear he wants tariffs on copper, but his Commerce Department first has to conduct an investigation and make recommendations.
Citi’s view marks a change from its February call for copper to fall to $8,500 a ton in the second quarter. The bank said it still expects a pullback “once tariff-induced US copper import demand collapses, which we expect as Section 232 copper tariff implementation draws nearer.”
--With assistance from Mark Burton.
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