Copper’s Slide Exposes Market’s Uneasy Balance as Trade Tensions Bite

Copper prices opened April 30, 2025, under pressure, according to data from the London Metal Exchange, Shanghai Futures Exchange, and CFD markets. The benchmark price for copper stood near $4.78 per pound, down 1% overnight and extending a multi-day decline.

The market’s mood shifted as new Chinese factory data showed manufacturing activity contracted in April, with the official PMI dropping to 49 from 50.5 in March.

This contraction signals a turn in China’s industrial demand, the world’s largest copper consumer, and reflects how ongoing US-China trade tensions have begun to weigh on real activity.

The past month saw copper rally sharply, with prices up nearly 19% since January and hitting all-time highs in March. This surge came as traders scrambled to ship copper to the United States ahead of possible tariffs, tightening global supply.

LME inventories dropped from over 260,000 tons in February to just above 205,000 tons this week. Shanghai’s copper stockpiles fell by almost 55,000 tons last week, the steepest drop on record.

These figures point to a market that remains fundamentally tight, with physical supply constraints still evident. However, the recent price reversal exposes the market’s vulnerability to macroeconomic shocks.

Copper Outlook

Despite tight inventories, traders have shifted focus to demand risks. The US-China tariff dispute has not only triggered a rush of physical deliveries but also raised uncertainty for manufacturers and construction firms, which together account for the bulk of copper demand.

Chinese fabricators have postponed deliveries where possible, and physical premiums in Shanghai have collapsed by 65%, reflecting softer spot demand. Technical analysis confirms the bearish sentiment.

Copper prices broke below key moving averages, and indicators such as the Relative Strength Index and Commodity Channel Index show oversold conditions. The MACD remains marginally bullish, but momentum is fading.

Trading volumes have surged, with open interest expanding as new short positions dominate. The copper put/call ratio now stands at its highest since the pandemic selloff of 2020, signaling that traders hedge against further downside.

ETF flows illustrate the market’s split psychology. The United States Copper Index Fund is up 30% year-to-date, with $18.5 million in inflows in March, but these gains reflect earlier supply fears rather than current demand strength.

The International Copper Study Group projects a global refined copper surplus of 289,000 metric tons for 2025, suggesting that if demand growth falters, downward price pressure could persist. Copper’s narrative now revolves around the uneasy balance between supply constraints and demand uncertainty.

The rush to ship copper to the US ahead of tariffs has left the rest of the world with low stocks, but the latest data from China shows that even tight supply cannot offset the drag from weakening industrial activity.

The market’s next moves will depend on whether global demand stabilizes and if supply disruptions continue to limit availability. For now, copper trades on a tightrope, with neither bulls nor bears in clear control.

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