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| Copper |
Dollar weakness and easing trade tensions support industrial metals rally
Copper prices climbed on Monday, driven by improved risk sentiment following U.S. tariff exemptions and expectations of economic stimulus from China. These factors have helped stabilize market volatility after a sharp downturn in early April.
Benchmark LME three-month copper rose 1% to $9,246 per metric ton, touching a session high of $9,271.5, its strongest level since April 4. The metal has rallied 14% from last week's low of $8,105, triggered by renewed trade tensions between the United States and China, the world’s two largest economies.
The rebound came as President Donald Trump's administration announced tariff exemptions on key electronics, including smartphones and computers—mainly imported from China. Though temporary, the move eased fears of an escalating trade war, giving metals markets some breathing room.
“The pause in tariff measures may signal room for negotiation,” said Ole Hansen, head of commodity strategy at Saxo Bank. “Markets, especially industrial metals, remain headline-driven with volatility being the only consistent trend.”
Technical indicators show that copper is testing resistance at the 100-day moving average of $9,280. Market participants are also watching closely the spread between LME cash copper and the three-month contract, which recently moved to parity after fluctuating sharply in recent sessions.
China’s role remains critical. Despite a 5.2% decline in January-March copper and copper product imports, driven partly by stronger U.S. pricing, analysts anticipate stimulus actions from Beijing to boost infrastructure and industrial activity—both copper-intensive sectors.
Adding further support to the rally was a weaker U.S. dollar, making dollar-priced metals more attractive to buyers using other currencies.
In broader base metals trading on the London Metal Exchange (LME):
- Aluminium eased 0.2% to $2,392 per ton
- Zinc rose 0.1% to $2,651 per ton
- Lead added 0.1% to $1,916 per ton
- Tin surged 1.8% to $31,760 per ton
- Nickel jumped 2.7% to $15,470 per ton
With China potentially unveiling further economic support and U.S.-China tensions appearing to de-escalate—at least temporarily—copper may continue its upward trajectory. However, ongoing volatility remains a key risk factor for traders and manufacturers alike.
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