METALS-LME copper hits near six-month peak, still under the spell of Trump tariffs

(Recasts with prices at 1730 GMT) By Eric Onstad LONDON, March 25 (Reuters) - Copper prices extended gains to their highest in nearly six months on Tuesday as traders kept up speculative buying based on expected U.S. tariffs and the dollar weakened after U.S. data. Benchmark three-month copper CMCU3 on the London Metal Exchange (LME) shot up 1.5% to $10,105 a metric ton by 1730 GMT, having hit the strongest since September 30 at $10,130 after gaining 1% on Monday. Helping to fuel the gains in European afternoon trading was a weaker dollar .DXY on uncertainty around tariffs and after U.S. consumer confidence dropped for a fourth straight month in March. USD/ A softer dollar makes commodities priced in the U.S. currency less expensive for buyers using other currencies. Traders have been bidding up copper prices especially those in New York, after U.S. President Donald Trump ordered a probe into potential tariffs on copper imports to rebuild U.S. production of the metal. U.S. most active May Comex copper futures HGc3 climbed 2.2% to a record high of $5.21 a lb, bringing the premium of Comex over LME to $1,372 a ton or nearly 14%. "It's still all about the arbitrage trade and the ability to shift copper to the U.S., locking in a tiny profit. It looks like the premium is settling into a mid-range between nothing and 25% tariffs," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen. "This a market which is extremely difficult to trade right now. This is not end-user demand going through the roof. This is a technical transfer of stocks from one location to the next." There have been worries that siphoning copper to the U.S. would create shortages elsewhere, but that is not showing up in technical indications on the LME market, Hansen added. The spread between the cash LME and the three-month contract CMCU0-3 is still at a discount of $10 a ton instead of a premium, which would indicate shortages. On the Shanghai Futures Exchange, copper SCFcv1 climbed 1.2% and prices there flipped to a slight premium or backwardation in anticipation of robust Chinese demand. LME aluminium CMAL3 dipped 0.2% to $2,610.50 a ton while nickel CMNI3 climbed 1.5% to $16,260 zinc gained 0.8% to $2,968, lead CMPB3 advanced 2.1% to $2,080 and tin CMSN3 rose 1.6% to $34,900. ($1 = 7.2605 Chinese yuan) (Reporting by Eric Onstad; Editing by Shounak Dasgupta and Maju Samuel) ((eric.onstad@thomsonreuters.com; +44 20 7542 7093; Twitter https://twitter.com/reutersEricO; Reuters Messaging: eric.onstad.thomsonreuters.com@reuters.net)) (( For related news and prices, click on the codes in brackets: LME price overview RING= COMEX copper futures 0#HG: All metals news MTL All commodities news C Foreign exchange rates FX= SPEED GUIDES LME/INDEX ))