METALS-London copper drops as spectre of Trump tariffs looms

(Updates prices after Asia market close) NEW DELHI, March 26 (Reuters) - Copper prices in London dropped on Wednesday as concerns over looming U.S. tariffs weighed on sentiment, though sharper losses were averted as markets tracked a slight decline in the dollar. The benchmark three-month copper CMCU3 on the London Metals Exchange (LME) was down 1.2% at $9,986.50 a metric ton, as of 0708 GMT. The focus is on potential reciprocal tariffs that the Trump administration might adopt on April 2, causing some nervousness in the market. The dollar was adrift on Wednesday, with weak U.S. confidence data and concerns about the effect of sweeping tariffs on U.S. growth putting the brakes on a recent bounce. USD/ A softer dollar makes greenback-priced commodities less expensive for buyers using other currencies. Last month, U.S. President Donald Trump ordered a probe into potential new tariffs on copper imports to rebuild U.S. production of the metal critical to electric vehicles, military hardware, power grids and many consumer goods. Markets have been tracking the movement of the industrial metal to the U.S. ahead of a decision. "I agree there is significant diversion of units occurring towards the U.S. and stockpiles there are rising," said Natalie Scott-Gray, a senior metals analyst at StoneX. "Much of this material will be coming from usual sources i.e., Chile or Canada into the country ... Meanwhile, China is at a shortage of material, as units divert to the U.S. from producers like Chile, so they need material and could be taking it from the LME or off-exchange sources." Among other metals, LME aluminium CMAL3 was up 0.2% at $2,615 a ton, lead CMPB3 fell 0.5% at $2,074, zinc dipped 0.3% to $2,962, tin CMSN3 declined 0.9% to $34,750 and nickel CMNI3 eased 0.4% to $16,095 a ton. SHFE copper SCFcv1 was up 0.3% to 82,000 yuan ($11,288.70) a ton, SHFE aluminium SAFcv1 was up 0.3% to 20,720 yuan a ton, zinc SZNcv1 added 0.06% at 24,155 yuan, lead SPBcv1 advanced 0.5% to 17,615 yuan, nickel SNIcv1 gained 0.5% to 129,670 yuan, and tin SSNcv1 rose 1.3% to 277,650 yuan. ($1 = 7.2639 Chinese yuan) (Reporting by Neha Arora; Editing by Rashmi Aich, Janane Venkatraman and Sherry Jacob-Phillips) ((neha.dasgupta@thomsonreuters.com)) (( 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 ))