Copper prices fell sharply on Friday after US President Donald Trump threatened to impose 100% tariffs on Chinese imports starting next month. According to Commerzbank’s Head of FX and Commodity Research, Thu Lan Nguyen, the metal has since rebounded slightly as the US signaled openness to renewed trade talks.
Copper pressured by trade tensions but rebounds on softer tone
Nguyen noted that renewed escalation in the US-China trade dispute would weigh heavily on both economies — two of the most important markets for copper. “While Trump adopted a more conciliatory tone over the weekend and expressed openness to negotiations — contributing to a recovery — the threat of increased tariffs and the risk of further conflict escalation remain on the table,” she said.
During the last major flare-up in tensions in April, copper prices dropped roughly 16%, sliding from around USD 9,600 per ton to this year’s low near USD 8,100. Although markets currently expect some form of agreement between Washington and Beijing, Nguyen cautioned that “it is by no means guaranteed.”
Supply tightness triggers physical market squeeze
Despite recent volatility, physical copper supply has become increasingly tight. “Spot prices ended the day trading at a premium of USD 224 per ton over the three-month future — the second-highest level since records began in 1994 — signaling a shortage of physical material,” Nguyen highlighted.
She added that London Metal Exchange (LME) inventories, while higher compared to mid-June, have started to decline again in recent weeks, reinforcing signs of near-term tightness in the market.
