Copper prices hit multi-month highs on U.S. tariff concerns, boosted by rising demand in China and developments in Ukraine. LME prices reached $9,769/ton, while U.S. futures climbed to $4.86/lb. Market sentiment has improved, influencing other metals like zinc and aluminum.
On Wednesday, copper prices surged to multi-month highs, influenced by the anticipation of potential U.S. tariffs and improved demand signals from China. Three-month copper on the London Metal Exchange (LME) rose by 1.1% to $9,769 per ton, marking its highest level since November 5. Concurrently, U.S. Comex copper futures climbed 1.9% to $4.86 per pound, the highest since May 29 of the previous year.
The recent implementation of a 25% tariff on steel and aluminum products by the U.S. has prompted President Trump to investigate further tariffs on copper. This situation has led U.S. buyers to increase their stockpiles. Commodity strategist Ole Hansen from Saxo Bank noted, “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.”
Investor sentiment has strengthened following potential ceasefire discussions in Ukraine, alongside improved relations between the U.S. and Canada. In response, European stock markets jumped as Ukraine tentatively accepted a U.S. ceasefire proposal, coinciding with a U.S. decision not to escalate metals tariffs after Canada retracted electrical export surcharges.
In China, which is the largest consumer of metals, copper on the Shanghai Futures Exchange experienced a 2.08% increase fueled by positive demand forecasts, with the commodity reaching its highest point since September 30. Analysts from ANZ highlighted an uptick in underlying fundamentals, particularly in grid infrastructure and electric vehicle sectors.
The report outlined that “manufacturers, supported by recent stimulus measures, are ramping up production… copper cathode inventories in Shanghai and Guangdong extended declines from a peak due to fewer imports in recent months.” Zinc also rebounded as the best performer on the LME, gaining 1.5% to $2,956 per ton following Nyrstar’s production cut announcement.
In summary, copper prices have reached multi-month highs driven by anticipation of U.S. tariffs, bolstered demand in China, and potential geopolitical resolutions. With improving fundamentals and production ramp-ups in key sectors, the outlook for copper and other metals appears optimistic. The situation underscores the intersection of global trade dynamics and commodities performance, significantly affecting market sentiment.
Original Source: www.tradingview.com
