Copper Prices Decline Amid Economic Concerns

Copper prices experienced a decrease of over 2% on Wednesday, on track for their most significant monthly drop since November, influenced by disappointing data from China, a major consumer of metals, and continued uncertainty in trade relations.

The benchmark copper price on the London Metal Exchange (LME) decreased by 2.2% to $9,231 per metric ton as of 1045 GMT, marking its lowest point since April 17. Overall, prices have declined by 5% during April.

The Comex copper contract also saw a decline of 4.3%, reaching $4.63 per lb, which is the lowest it has been since April 17.

Recent data revealed a contraction in China’s factory activity during April, with the most rapid decrease in 16 months. This has fueled expectations for additional stimulus measures.

Expert Analysis

According to John Meyer, an analyst at SP Angel, macroeconomic uncertainty is currently restraining copper’s performance.

Meyer added that despite potential recessionary impacts from U.S. tariffs in the West, ongoing stimulus efforts in China and other parts of Asia are expected to sustain manufacturing activities and promote economic expansion.

The standstill in efforts to de-escalate the trade conflict between the U.S. and China also put pressure on financial markets.

Trade Discussions

Despite claims by U.S. officials about ongoing talks, China has refuted any active discussions. U.S. Treasury Secretary Scott Bessent commented on Tuesday that Beijing would eventually recognize the unsustainable nature of Chinese tariffs for its economy.

The U.S. economy is expected to show signs of stagnation or contraction in the first quarter, according to data expected to be released on Wednesday.

A rise in the dollar index has made metals priced in dollars more expensive for international buyers.

Inventory Levels

A considerable reduction in inventories at warehouses monitored by the Shanghai Futures Exchange (SHFE) has supported copper prices. Inventories fell by 23.5% from last Friday to 89,307 tons, reaching their lowest level since January 17, following a 32% decrease the previous week.

This stock decrease has been attributed to the redirection of copper to the U.S. due to tariff threats and limited scrap supplies.

Meyer noted that the scarcity of scrap in China is a significant problem, leading to a substantial copper concentrate deficit that forces Chinese smelters to reduce their operational capacity.

In other metals trading, aluminum decreased by 1% to $2,442 a ton, zinc fell by 0.5% to $2,635.5, lead declined by 0.7% to $1,963.5, tin increased by 0.4% to $32,015, and nickel rose by 0.3% to $15,595. The majority of these metals are trending toward monthly losses.