Copper prices reached multi-month peaks as traders anticipated possible U.S. tariffs amid improving demand from China and a potential Ukrainian ceasefire. Prices on the LME and Comex rose significantly, while concerns over inventory depletion in the U.S. fueled buying. The overall market sentiment appears to be increasingly positive, supported by underlying fundamentals in demand and production.
On Wednesday, copper prices reached multi-month highs as traders anticipated potential U.S. tariffs. Positive investor sentiment was fueled by signs of improving demand in China and the possibility of a ceasefire in Ukraine. The three-month copper price on the London Metal Exchange (LME) rose by 1.1% to $9,769 per ton, the highest level since November 5, while U.S. Comex copper futures climbed 1.9% to $4.86 per pound, the highest since May 29 of the previous year.
Effective from Wednesday, U.S. tariffs of 25% on steel and aluminum products prompted speculation, as President Donald Trump started a probe into possible new tariffs on copper. This led to increased stocking by U.S. players. Ole Hansen, head of commodity strategy at Saxo Bank, observed, “There’s a lot of copper being shipped to the U.S., depleting the inventory levels elsewhere and underpinning prices outside of the U.S.” Furthermore, underlying sentiment improved, spurred by developments in U.S.-Canada relations and the potential ceasefire.
European stock markets surged following Ukraine’s acceptance of a U.S. ceasefire proposal. Additionally, Trump’s decision not to double down on metals tariffs came after Ontario province’s suspension of surcharges on electricity exports to the U.S.
In China, the largest consumer of metals, copper on the Shanghai Futures Exchange closed the daytime session up by 2.08%, sparked by expectations of better demand. The ANZ Downstream Copper Demand Indicator demonstrated positive growth, especially in grid infrastructure and electric vehicle production. Analysts noted that manufacturers, supported by recent stimulus efforts, have accelerated production, and copper inventories in major cities are declining due to reduced imports.
Zinc emerged as the best performer on the LME, rebounding to gain 1.5% to $2,956 per ton after Nyrstar announced a 25% production cut at its Hobart operations in Australia from April. Other metals also experienced gains, with LME aluminium rising by 0.6% to $2,719.50 per ton, nickel increasing by 1.4% to $16,720, lead climbing by 1% to $2,071.50, and tin adding 0.9% to reach $33,450.
Copper prices have recently soared due to anticipated U.S. tariffs, improving demand in China, and geopolitical developments. The market showed resilience as U.S. players stockpiled in light of new tariffs, and inventory levels continued to dwindle. Overall, the outlook for copper remains optimistic, supported by stimulus-driven production in both the U.S. and China, while other base metals also exhibited gains across the board.
Original Source: www.tradingview.com
