METALS-Comex copper hits record high as US import tariff fears mount

(Updates prices)

By Polina Devitt

LONDON, March 26 (Reuters) - U.S. copper futures hit a record high on Wednesday, expanding their premium over London prices with rising bets on the level of import tariffs that U.S. President Donald Trump may impose on the metal.

The most active May copper futures on the U.S. Comex exchange climbed 0.5% to $5.239 a pound, after hitting a record high of $5.374.

Three-month copper on the London Metal Exchange was down 1.8% at $9,934 a metric ton by 1654 GMT after hitting $10,164.5, its highest since June 7 in early-trading hours.

The premium on Comex copper over the LME price, a global benchmark, widened to a record of $1,624 per ton or 16%.

The market is pricing in the probability of a U.S. 25% import tariff on copper, said Dan Smith, head of research at Amalgamated Metal Trading. "It's not 100% baked in but the probability is getting higher."

A month ago, Trump ordered an investigation into potential new tariffs on copper imports with the aim to rebuild U.S. production of the metal.

Technically, the probe can take up to nine months, but Bloomberg, citing people familiar with the matter, reported that the U.S. copper tariffs could be coming within several weeks.

U.S. 25% tariffs on steel and aluminium products took effect earlier in March. Trump has also said that his "reciprocal tariffs" to bring U.S. tariffs to other countries' levels will take effect on April 2.

With the United States importing about 40% of its needs in copper, mainly from Chile and Canada, the focus is on supplies to the U.S. ahead of the possible decision and worries that attempts to divert the metal from other consuming regions would tighten the market.

Available LME copper inventories have fallen sharply since mid-February to 111,000 tons, but the spread between the cash LME and the three-month contract remains at a discount, indicating no acute shortage for nearby supply.

On the supply side, Glencore ( GLCNF ) declared force majeure on copper shipments from its Chilean Altonorte smelter, where production has been suspended, two industry sources told Reuters.

Meanwhile, LME aluminium was steady at $2,608.50 a ton and lead rose 0.1% to $2,087. LME daily data showed major fresh cancellations for both metals in the LME-registered warehouses.

LME zinc lost 0.5% to $2,956.50, tin dipped 0.1% to $35,005, while nickel gained 0.8% to $16,275. (Reporting by Polina Devitt; Editing by Jane Merriman, Shounak Dasgupta and Nia Williams)