Copper Prices Increase Amid Trade War Developments

London: On Friday, copper prices experienced an upswing, fueled by indications of progress in resolving the trade dispute between the United States and China.

The price of three-month copper on the London Metal Exchange (LME) increased by 2%, reaching $9,385.50 per metric ton by 0945 GMT, following a rise of nearly 1% in the previous trading session.

Earlier in the week, on Wednesday, copper values had declined by over 3% due to concerning data from China, a major consumer of metals, and anxieties regarding the potential impact of U.S. tariffs on global economic expansion.

According to China’s Commerce Ministry on Friday, Beijing is currently “evaluating” Washington’s proposal to engage in discussions regarding U.S. President Donald Trump’s tariffs.

President Trump had expressed on Wednesday his confidence in the possibility of reaching an agreement with China.

Ole Hansen, Head of Commodity Strategy at Saxo Bank in Copenhagen, commented that “The market is attempting to foster some optimism based on the recent statements from both sides,” adding, “Essentially, investors are trying to determine whether we have reached the peak of tariff implementation for the time being.”

Hansen suggested that further upward movement could be limited, noting strong resistance around the 50-day moving average at $9,476.

The most actively traded U.S. July Comex copper futures saw a 1.3% increase to $4.69 per pound. This adjustment brings the premium of Comex over LME to $967 per ton, as traders assess the potential effects of U.S. tariffs on the metal.

Concerns about the economic consequences of tariffs were intensified by data released on Thursday, which revealed a further contraction in U.S. manufacturing during April. Additionally, tariffs on imported goods were found to be putting pressure on supply chains.

Kieran Tompkins from Capital Economics noted, “Unless there is a straightforward path to a U.S.-China trade agreement, which seems doubtful, volatility is likely to remain a prominent characteristic of industrial metals markets for some time.”

In terms of other metals, LME aluminum increased by 0.9% to $2,438 per ton, zinc rose by 1.6% to $2,617.50, lead increased by 0.6% to $1,963, tin advanced by 2.1% to $30,400, and nickel climbed by 0.9% to $15,395.

It is important to note that China’s financial markets will be closed from May 1-5 for a public holiday, with trading activities scheduled to resume on Tuesday, May 6.