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Copper prices tumbled on Thursday amid growing concerns that President Donald Trump’s newly imposed tariffs could severely impact demand for industrial commodities.
Although metals were largely excluded from the sweeping trade restrictions, fears remain that the broader economic effects of Trump’s policies could slow global growth and hurt consumption.
Copper takes a hit
On the COMEX exchange, copper for May delivery fell to $4.8390 per pound ($10,645 per tonne), marking a 10% decline from last week’s record high. Meanwhile, copper on the London Metal Exchange slid as much as 2% to $9,510.50 per tonne, with aluminum also dropping to its lowest level in nearly seven months.
“Industrial metals are under short-term pressure, as investors pour money into safe-haven assets and sell risk assets,” said Jia Zheng, a senior trader at Shanghai Dongwu Jiuying Investment Management Co., in an interview with Bloomberg.
Adding to the uncertainty, China—facing a 54% tariff on its shipments to the U.S.—has vowed countermeasures, while Japan has urged the Trump administration to grant exemptions. The European Union, hit with a 20% levy—double the global minimum of 10%—is also expected to retaliate.
Copper stocks tumble
The sharp decline in copper prices had an immediate effect on major copper producers, with most of them experiencing significant losses in the stock market.
Teck (TSE: TECK.B) suffered the steepest decline, dropping 8.2%. Freeport-McMoRan (NYSE: FCX) also took a major hit, plunging 7.9%. Glencore plc (LON: GLEN) and Anglo American plc (LON: AAL) saw their shares decline 6.1% and 6.3%, respectively, amid the broader market sell-off.
BHP (NYSE: BHP) and Rio Tinto (NYSE: RIO) posted losses of 1.9% and 1.2%, respectively.
Market analysts warn that copper prices may face continued downward pressure as investors digest the full implications of the new tariffs. Citigroup analysts, including Max Layton, predict that copper prices could slide further to $8,500 per tonne in the second quarter as tariff-related concerns weigh on global growth expectations.
At the same time, a substantial amount of physical copper—potentially up to 500,000 tonnes—could be redirected to the U.S. to take advantage of the ongoing arbitrage opportunity, according to trade house Mercuria.