Last week, copper prices surged to a three-month high, extending their longstanding rally, amid tightening global supply fears and a rush by exporters to redirect shipments to the US ahead of potential import duties.
Yesterday traders flooded the market with bids and pushed copper prices to a historic high of $5.88 per pound, swiftly reacting to a fresh round of tariff threats from President Trump which accelerated the rally and sparked volatility across metals markets once again.
According to numerous sources, the Trump administration plans to impose a 50% import tariff on the industrial metal in order to minimize reliance from abroad but also to incentivize domestic production. Rising import levies on copper, an essential metal for industry, is a copy-paste like move seen back in April when the administration announced a 50% tariff on aluminium.
Copper is critical for a wide range of sectors including electronics, construction, electric vehicles, military hardware, and industrial machinery, due to its excellent conductivity, ductility, and resistance to corrosion.
From a fiscal point of view, the tariff aims to narrow the trade deficit, a longstanding issue of the US, but only in the short-term, according to economists who highlight that in the long run such tactics may be detrimental to the overall US economy.
The tariff is expected to raise costs for manufacturers and builders, likely pushing up prices for consumer goods and infrastructure projects, and lead to the reignition of inflationary pressures in the U.S. economy. Furthermore, higher copper prices could slow investment and production in industries dependent on affordable raw materials, potentially dampening economic growth.
Technical Analysis
Copper Chart – Copper futures seek to lock in gains and find footing at historic highs, after yesterday’s 17% spike
Resistance: 5.7300 (R1), 5.8800 (R2), 6.0500 (R3)
Support: 5.4000 (S1), 5.2000 (S2), 5.0000 (S3)
