[Christian Harris]

Copper futures eased to $4.85 per pound on Friday after briefly hitting a nine-month high of $4.93 earlier in the session, as fresh data dampened the outlook for global manufacturing activity.

In China, credit aggregates contracted in February, halting the strong momentum seen at the start of the year and raising concerns about the country’s manufacturing sector, which is a key driver of copper demand.

Meanwhile, in the US, consumer sentiment and inflation expectations slumped, adding to fears of economic stagnation.

Despite the pullback, copper futures retained most of their gains for the month, trading $0.40 above comparable contracts at the London Metal Exchange (LME).

This resilience was largely driven by ongoing concerns around tariffs, after President Trump signed an executive order to initiate a review of copper imports.

The president had previously signalled his intention to impose tariffs on the metal during a speech before Congress.

Such a move would increase reliance on domestic copper production, which is currently limited to just two major smelters.

The US imports nearly half of its copper, primarily from Chile, Canada, and Peru, making it vulnerable to supply disruptions and price volatility.

The tariff review, conducted under Section 232 of the Trade Expansion Act of 1962, aims to assess the national security implications of copper imports.

Factors under consideration include the metal’s critical role in defence, energy, and infrastructure, as well as the impact of foreign subsidies and overcapacity on US industry competitiveness.

If tariffs are imposed, they could reshape the global copper market, potentially driving up prices and incentivising domestic production.

However, the broader economic outlook remains uncertain.

While China’s manufacturing slowdown and US economic concerns weigh on demand, the potential for tariffs introduces a layer of geopolitical risk that could keep prices elevated.

Analysts are closely watching how these dynamics unfold, as they could have significant implications for industries reliant on copper, from construction to electric vehicles.

Will copper prices stabilise, or are we in for more volatility? 🤔📈

Chart: Trading Economics

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