Aluminium slips on rising expectations of U.S. tax on imports

LONDON, March 7 (Reuters) – Aluminium prices slid on Wednesday as the prospect of U.S. tariffs were bolstered by the resignation of Gary Cohn, a key advocate for free trade in the White House, while base metals generally came under pressure from worries about a trade war. Benchmark aluminium prices on the London Metal Exchange were down 0.9 percent at $2,127 a tonne, towards the lows seen last week after U.S. plans for a 10 percent levy on aluminium were announced. “Nobody should be surprised by the idea of taxes on metal imports in the United States,” said SP Angel analyst John Meyer. Europe has drawn up a list of U.S. products from bourbon to Harley Davidson motorbikes on which to apply tariffs if U.S. President Donald Trump follows through on a plan to impose global duties on aluminium and steel, EU sources said. Canada will also retaliate against any U.S. tariffs on steel and aluminium products, officials there say. COHN: The top economic adviser to U.S. President Donald Trump said on Tuesday he would resign, a move that comes after he lost a fight over plans for import tariffs. OPPOSITION: “Apart from a few U.S. steel mills and a number of U.S. domiciled aluminum smelters, most other companies, trade and industry associations, as well as most of Congress, are all vehemently opposed,” said INTL FCStone analyst Edward Meir. “Unfortunately for the anti-tariff crowd, the president does have the legal authority to impose these duties without Congress’s approval as long as he finds authority in existing statute.” EXCESS: Expectations of growing surpluses of aluminium has reinforced the trend of falling discounts for the cash contract over the three-month forward, at around two-month lows of $18 a tonne from a premium near $50 a tonne on Feb 19. STOCKS: Rising stocks of aluminium in LME approved warehouses, up at 1.32 million tonnes from around 1.06 million tonnes a month ago, are also weighing on prices. SHANGHAI: Aluminium stocks in warehouses monitored by the Shanghai Futures Exchange are at record highs above 842,000 tonnes. TECHNICALS: Price support is around $2,120 near last week’s low and strong resistance comes in around $2,150, near the 100-day moving average. COPPER: Prices of copper were down 1.2 percent at $6,918 a tonne as the market looked ahead to key data from top consumer China, accounting for nearly half of global demand estimated at around 24 million tonnes this year. CHINA: A raft of Chinese economic data over the next couple of weeks is expected to show growth was mostly stable at the start of the year as exports picked up and factory activity remained largely resilient.