Copper Prices Slip as Trade Tensions Weigh on Market Sentiment

Copper futures retreated to $4.54 per pound on Wednesday morning, extending Tuesday’s losses as global trade concerns continue to dampen investor appetite.

The metal has lost 1.25% in the last trading session, according to market data released earlier today. London Metal Exchange copper prices dropped to $9,094 for cash settlement on April 15, down from $9,212.50 the previous day.

Three-month contracts also fell to $9,150 from $9,240 over the same period. This downward momentum reflects growing caution among traders facing uncertain market conditions.

The metal’s price chart reveals a clear bearish pattern emerging over the last 48 hours. Copper now tests crucial support around $4.54, having failed to sustain momentum above the $4.63-$4.64 resistance zone.

The formation of a descending triangle on hourly charts signals potential further weakness, with moving averages beginning to show bearish crossover signals.

LME warehouse inventories increased to 212,475 tons as of April 15, continuing an upward trend from 207,825 tons just a day earlier. This inventory build adds pressure to prices, especially in European markets where economic concerns already weigh on sentiment.

Copper Market Caught in Tariff Uncertainty

President Trump’s directive to investigate potential new tariffs on critical mineral imports drives much of the current uncertainty. While smartphones and certain electronics received exemption from Chinese tariffs over the weekend, copper remains vulnerable to policy shifts, creating hesitation among buyers.

“The market moves from one headline to the next in this stressful environment,” noted Ole Hansen, head of commodity strategy at Saxo Bank. “There’s growing skepticism about whether Trump will implement all proposed tariffs given their potential negative impact on the U.S. economy.”

The premium between US copper futures and LME prices widened significantly to $955 per ton from $572 last Thursday. This unusual gap reflects concerns about supply disruptions and stimulates stockpiling activity in American warehouses.

Supply developments show mixed signals. Antofagasta reported a 20% increase in Q1 2025 copper production while maintaining full-year guidance of 660,000-700,000 tonnes.

Meanwhile, Chinese smelters have increased refined copper exports by 98% year-on-year to 50,000 tons in early 2025. Analyst firm Citi adjusted its outlook, now forecasting a gradual decline in copper prices over the coming quarter.

Their analysts advised waiting to purchase until “President Trump reverses tariffs, reallocates tariff revenues, or until Federal Reserve or Chinese policy measures are implemented.”

Despite short-term weakness, copper’s long-term fundamentals remain supportive. The International Energy Agency warns of a significant supply gap after 2025, with mining output potentially struggling to meet accelerating demand from renewable energy and electric vehicle sectors.

The contrasting signals between physical inventories rising in Western markets and declining in China highlight the fragmented nature of current copper dynamics.

For the remainder of the week, market participants will closely monitor trade policy developments and physical premiums for directional cues.

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