Copper Retreats as Trade Tensions Spark Risk-Off Mood

Copper futures declined to approximately $4.55 per pound on Wednesday, overturning the gains made earlier in the week as intensifying global trade tensions reduced investor interest in riskier assets. This decline was triggered by renewed apprehensions surrounding U.S. trade policy, particularly after President Donald Trump instructed an investigation into imposing potential new tariffs on all critical mineral imports, many of which are predominantly sourced from China. In response, Beijing has strongly opposed what it considers Trump’s “trade bullying,” preparing itself for the wider repercussions of existing and prospective U.S. tariffs. Market participants express growing concern that the national security justification previously employed for tariffs on steel and aluminum may soon be applied to copper as well. This uncertainty has increased the premium on U.S. copper futures compared to similar contracts on the London Metal Exchange (LME), reflecting worries over limited domestic smelting capacity and potential supply chain disruptions.

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