Copper Prices Surge on Easing Trade Tension Concerns

London: Copper prices reached their highest levels in three weeks on Wednesday, buoyed by diminishing worries regarding global trade frictions. This shift followed indications from U.S. President Donald Trump suggesting a potential reduction in import tariffs on goods from China, a major consumer.

Benchmark copper on the London Metal Exchange (LME) saw a rise of 0.7%, trading at $9,438 per metric ton as of 1033 GMT. Earlier in the session, it peaked at $9,481.5, marking its highest point since April 3. The metal has experienced a surge of over 15% since hitting a 17-month low of $8,105 earlier in the month.

Statements from both Trump and U.S. Treasury Secretary Scott Bessent have independently pointed towards a possible de-escalation in trade tensions between the U.S. and China. They suggested that any eventual trade agreement could involve substantial tariff reductions.

According to a copper trader, market dynamics are currently less focused on fundamental factors and more responsive to pronouncements from Trump and other U.S. officials. The trader also noted that a softening in Trump’s stance towards Federal Reserve Chair Jerome Powell contributed to the improved market sentiment.

Trump had previously criticized Powell and threatened his position due to the central bank’s reluctance to lower interest rates, but has since eased those threats.

Commerzbank, in a note, expressed caution regarding further upward potential in copper prices, citing fundamental factors.

Shanghai Copper Strengthens as Dollar Weakens

Commerzbank referenced the International Copper Study Group’s (ICSG) recent monthly bulletin, which indicated a surplus of copper in February. Copper is a key material in the power and construction sectors.

Commerzbank noted the surprising nature of this surplus, given existing concerns about potential shortages of copper ore, which could lead to decreased metal processing.

China, the leading producer of refined copper, saw an 8.6% year-on-year increase in copper output in March, reaching 1.25 million tons.

Industrial metals markets are closely monitoring purchasing managers’ surveys in manufacturing to gauge demand prospects. Flash manufacturing PMI data for the Eurozone indicated a contraction in activity across Europe.

In other metals trading, aluminium increased by 1.4% to $2,413 per ton, zinc rose by 1.7% to $2,639, lead gained 0.4% to $1,930, tin remained relatively stable at $31,115, and nickel increased by 0.5% to $15,755 per ton.