Copper prices reached multi-month highs amidst concerns over U.S. tariffs, bolstered by improving demand in China. Prices surged on both the LME and Comex exchanges, while market sentiment improved on geopolitical developments, including a ceasefire in Ukraine. Positive growth in the demand for copper, particularly for infrastructure and electric vehicles, was noted, alongside an increase in prices for several other metals.
On Wednesday, copper prices reached multi-month highs as traders braced for potential U.S. tariffs and responded to improved demand signals from China. The three-month copper price on the London Metal Exchange (LME) increased by 1.1%, rising to $9,769 per ton, marking its highest level since early November. Similarly, U.S. Comex copper futures surged by 1.9%, reaching $4.86 per pound – the highest since May 29 of the previous year.
The recently enacted 25% tariffs on steel and aluminum in the U.S. prompted an investigation into possible new tariffs on copper, driving U.S. market participants to increase their stockpiling efforts. Ole Hansen, head of commodity strategy at 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 saw a significant uplift due to developments regarding a possible ceasefire in Ukraine and improving U.S.-Canada relations. Released on Wednesday, European stock markets witnessed gains following Ukraine’s acceptance of a U.S. ceasefire proposal, with President Trump moderating his stance on potential metal tariffs post-Canada’s suspension of electricity surcharges.
In China, the largest consumer of copper, the Shanghai Futures Exchange reported a 2.08% increase in copper prices during day trading, correlating with increasing demand expectations. The ANZ Downstream Copper Demand Indicator reflects positive growth trends, particularly in grid infrastructure and electric vehicles. Analysts indicated that manufacturers are expanding production spurred by recent stimulus measures, resulting in a decline in copper inventories in Shanghai and Guangdong because of reduced imports.
In addition to copper, zinc emerged as the top performer on the LME, rising by 1.5% to $2,956 per ton following production cut announcements from Nyrstar. Other metals experienced favorable movements as well, with LME aluminum and nickel climbing by 0.6% to $2,719.50 and 1.4% to $16,720 per ton respectively, while lead grew by 1% to $2,071.50 and tin increased by 0.9% to $33,450.
The recent performance of copper and other metals is significantly influenced by evolving market dynamics, including potential U.S. tariffs and improving demand in China. Noteworthy gains in both LME and Comex prices reflect heightened investor sentiment, while supply dynamics and geopolitical factors continue to shape the industry. The overall picture reveals robust demand growth driven by infrastructure and electric vehicle sectors, amidst fluctuating inventory levels.
Original Source: www.tradingview.com
