Copper held a modest drop on Tuesday as traders weighed the risk that US tariff policy may not be adopted. Benchmark three-month futures in London traded near $14,340 a ton after falling 0.5% on Monday. While the prospect of a US levy has drawn vast amounts of copper into US warehouses this year, tightening conditions elsewhere, traders are growing wary that President Donald Trump may not follow through. "It's all about US tariffs -- the possibility of introducing tariffs is fading somewhat," said Jiang Hang, a trader at China-Base Ningbo Group Co. "Copper would face a significant pullback if tariffs don't come through."
Copper has advanced about 15% this year, touching a record below $15,000 a ton last month, as more metal piled up in the US. The commodity's advance has been supported by optimism about increased demand from the global energy transition and data-center build-out, as well as signs of supply challenges at major pits. BHP Group said copper production in the three months to September fell 19% from a year earlier, highlighting grade declines, scheduled maintenance, and disruptions from severe weather. Full-year output guidance was unchanged.
China-Base Ningbo's Jiang said rising expectations for US rate hikes were also keeping industrial metal prices in check. After tightening policy last month for the first time since 2023, Federal Reserve officials meet next week to decide whether to pause ahead of the midterm elections or hike again. Copper was steady at $14,340.50 a ton on the London Metal Exchange at 10:53 a.m. in Shanghai. Other metals were flat to lower, with aluminum down 0.4% at $3,003.50 a ton.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing