Copper Markets Plunge as Tariff Policy Triggers Historic Sell-Off

The global copper market witnessed a dramatic shift over the last 24 hours, with prices and sentiment reversing sharply following a pivotal policy announcement in the United States.

Official exchange data recorded a 4.2% fall in copper prices, settling around $4.42 per pound by the morning of July 31, 2025. The London Metal Exchange mirrored the slump, registering cash prices at $9,699.50 per ton by the previous close.

Volatility and volumes surged to multi-year highs as traders digested the implications for the world’s most critical industrial metal. At the heart of the sell-off, U.S. President Donald Trump’s new executive order fundamentally changed expectations.

The administration imposed a 50% import tariff—effective August 1—but crucially, it only applies to semi-finished copper products. Refined copper, which dominates futures and global trade, remains exempt.

Markets had priced in far broader tariffs for weeks, driving U.S. copper prices to significant premiums. With the unexpected exemption, traders rushed to unwind speculative long positions and excess inventories, triggering forced sales across exchanges.

Official warehouse data show clear signs of market stress. LME copper stocks jumped from 127,625 to 136,850 tons, highlighting the wave of inventory liquidation.

Over on U.S. bourses, ETF fund flows flipped sharply. More than $10.9 million flowed out of major copper funds in July, erasing gains from earlier inflows. These outflows accentuated the sense of disorder as investors and traders recalibrated strategies in real-time.

Copper Market Crashes Amid Policy Shock and Liquidity Tightening

Technical analysis amplifies the severity of the situation. The daily chart displays a massive breakdown. Candlestick patterns confirm a sustained close below prior support levels, with all major moving averages breached.

The RSI fell to 25, signaling extreme oversold conditions. MACD momentum turned decisively negative as well. Four-hour charts reinforce the panic, revealing a cascade of red candles and a collapse below critical Bollinger Bands.

The Global Liquidity Index NDQ—visible as the yellow line—dropped sharply, reflecting tightened global funding conditions and risk aversion among liquidity providers.

Fundamental and macroeconomic factors contributed to the gridlock. Minor supply disruptions in Chile had supported prices into July, while demand for copper remained firm due to long-term trends in electrification and construction.

However, these underlying drivers proved no match for the abrupt change in U.S. trade policy and the subsequent liquidation cycle. Asian and European markets offered little resistance to the wave of selling, and global arbitrage opportunities disappeared as price differentials collapsed.

The last 24 hours underscored the copper market’s vulnerability to policy shocks and speculative excess. Hard figures from exchanges, ETF flows, and technical signals all confirm a market in retreat.

Short-term outlooks now hinge on whether new equilibrium levels can form as participants wait for clarity on trade, inventories, and downstream demand.