Copper prices have hit multi-month highs due to prospective U.S. tariffs and positive demand signals from China. On the LME, three-month copper rose 1.1% to $9,769 per ton, while Comex copper futures advanced 1.9% to $4.86 per pound. Improved sentiment is attributed to geopolitical factors and adjustments in global supply dynamics.
On Wednesday, copper prices reached multi-month highs, spurred by potential U.S. tariffs and improving demand signals from China. The three-month copper futures on the London Metal Exchange (LME) rose by 1.1%, reaching $9,769 per ton, marking its strongest point since early November. Similarly, U.S. Comex copper futures increased by 1.9%, reaching $4.86 per pound, the highest level observed since May of the previous year.
The initiation of 25% tariffs on steel and aluminum products in the U.S. coincided with President Donald Trump launching an inquiry into potential new tariffs on copper. This has led to increased purchases by U.S. buyers. “There is a lot of copper being shipped to the U.S., depleting the inventory levels elsewhere and underpinning prices outside of the U.S.,” stated Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
Investor sentiment has notably improved due to recent developments, including a proposed ceasefire in Ukraine and positive changes in U.S.-Canada relations. European stock markets surged after Ukraine agreed to consider a U.S. ceasefire. In this context, Trump also decided against doubling the metals tariffs after Ontario, Canada, suspended plans to impose electricity export surcharges to the United States.
In China, the primary consumer of metals, copper futures on the Shanghai Futures Exchange concluded the daytime session 2.08% higher, reaching levels not seen since late September. Analysts from ANZ highlighted that the underlying fundamentals are improving, particularly with the Downstream Copper Demand Indicator reflecting positive growth, especially in grid infrastructure and electric vehicles. “Manufacturers, supported by recent stimulus measures, are ramping up production… copper cathode inventories in Shanghai and Guangdong extended declines due to fewer imports recently,” they noted.
In the broader metals market, zinc emerged as a leading performer, gaining 1.5% to reach $2,956 per ton after Nyrstar announced a 25% production cut at its Hobart zinc operations. Other metals also exhibited growth, with LME aluminium increasing by 0.6% to $2,719.50 per ton, nickel rising by 1.4% to $16,720, lead climbing by 1% to $2,071.50, and tin up by 0.9% to $33,450.
In summary, copper prices have surged due to anticipated U.S. tariffs and signs of increased demand from China, alongside geopolitical developments influencing investor sentiment. The recent upward trend in prices reflects both supply and demand dynamics, with notable contributions from stimulus measures in China and production adjustments in other metals. As traders continue to navigate these changes, market indicators suggest a vigilant outlook for future copper and metal performance.
Original Source: www.tradingview.com
