Tariff Wars Shake Copper Prices and Global Market Stability

Copper

China and Russia Drive Supply Expansion as Trade Tensions Fuel Volatility

Copper prices have remained highly volatile through early 2025, driven by escalating global tariff conflicts and major shifts in production strategy by top suppliers like China and Russia. These developments have not only disrupted price stability but also heightened risk in the broader commodities and financial markets.

Copper futures surged to a record $5.2770 per pound in March before plunging to $4.03 in early April amid tariff-related uncertainty. Traders initially stockpiled copper ahead of expected hikes, but April’s downturn reversed gains until prices began rebounding mid-month. Analysts now view copper as having reached a critical inflection point, with upcoming price moves expected to influence global stock and commodity indices.

China Leverages Byproducts to Offset Margin Pressures

Despite reduced margins, China increased refined copper output to 1.25 million tons in March, up 8.6% year-over-year. First-quarter production reached 3.54 million tons, marking a 5% rise. The surge was aided by rising demand and strategic focus on valuable byproducts, such as gold and sulphuric acid, the latter of which soared 50% to its highest price since March 2022.

Chinese smelters are increasingly refining gold from copper ore, capitalizing on bullish gold prices to sustain profits amid copper price instability. The government is also encouraging lithium battery firms to improve R&D to manage supply volatility and secure the country's role in the global energy transition.

Russia Plans Massive Copper-Gold Investment

Meanwhile, Russia is ramping up its resource development agenda. State-backed VEB plans to invest over one trillion rubles (approx. $13.4 billion) to develop the Baimskaya copper-gold deposit in Chukotka. The project could raise Russia’s copper output by 25% and gold production by 4%.

Part of Moscow's strategy to shift focus eastward following EU sanctions, the Arctic-located deposit is central to Russia’s plans to become a more self-reliant global metals supplier.

Market Outlook: Inflection Point or Warning Sign?

If copper rebounds above resistance levels, experts believe it could signal a broader economic recovery. However, a dip below $4.03 may indicate the onset of a global recession, prompting investors to flock to gold and silver as safe havens.

For now, the red metal remains a bellwether for global economic sentiment—both a beneficiary of the green transition and a victim of geopolitical instability.