Steel, Aluminium and other articles were exempt from any reciprocal tariffs announced by President Trump on Thursday morning, but the administration has already imposed 25% tariffs on their imports earlier. Copper is also part of the exemption list but tariffs on that is likely to be announced soon.
Zinc, nickel, tin and a wide range of other commodities were also exempted from the country-specific tariffs, though they could be subject to Section 232 probes in future.
As fears over a US recession ramp up, concerns are also mounting over a broader global slowdown with China and the European Union both vowing countermeasures to Trump’s levies.
Copper on the LME fell nearly 4%, the biggest intraday fall since November last year. Citigroup believes that another 8% to 10% fall is in store for Copper prices going forward. Prices are down to their lowest level in three weeks.
Prices of Silver are down to a one-month low, Platinum prices are down to their lowest in two-and-a-half months.
Global commodities are facing a rout despite a sharp sell-off in the US Dollar as well. A weak US Dollar is generally positive for metals as it helps reduce the buying price for foreign buyers, thereby reducing their cost and improving their bottomline.
The US Dollar index, from its post-Trump election high of 110, slipped below levels of 102 on Thursday amidst the equity market sell-off.
“The whole play on cement and metals, at least in our portfolio, is coming from the perspective that if you look at metals, it’s a global commodity – with China sort of recovering with the stimulus packages announced in China and Chinese demand coming back – metals will do well, both on the volume front and the pricing front. That’s the broad play. Metals have underperformed over the last two to three years because of muted global demand and China being out of the whole economic stimulus play,” Siddharth Vora of Prabhudas Lilladher told CNBC-TV18 on Thursday.
Nilesh Shah of Kotak Mahindra AMC had warned on Thursday that with the reciprocal tariffs now in place, the world, including India, will have to be careful of China dumping their goods across the world.
Vedanta shares are down 7% at ₹410.55, while those of NALCO are down 6% at ₹162.14. Hindalco and Tata Steel are among the top losers on the Nifty 50 index.