Key Takeaways
- Copper prices fell from record highs as the White House delayed tariff decision.
- The metal's winning streak of 10 weeks came to an end amid uncertainty.
- Market analysts believe the latest news could affect future metal shipments.
Copper prices have seen a significant drop, ending a 10-week winning streak, following reports that the White House has yet to decide on refined copper tariffs. This development has caused a sharp decline from the recent record highs, with the metal's price on the London Metal Exchange down about 1% for the week.
On Friday, the three-month copper contract on the London Metal Exchange rose marginally by 0.26% to $14,271 a metric ton by 0312 GMT, but overall, the price fell more than 4% from the $14,875 a metric ton peak hit on Thursday. The most-traded copper contract on the Shanghai Futures Exchange also saw a decline, falling 2.82% to 108,580 yuan ($16,180.85) a ton, down about 0.5% for the week.
White House officials are currently weighing the potential impact of higher metal prices on manufacturing costs against the benefits of encouraging more domestic mining. Reuters reported on Thursday that the administration is considering these factors, citing two people familiar with the matter. According to ING commodities analysts, the market had largely assumed that tariffs would go ahead, but the latest news has removed some of the tariff premium from prices.
The reversal in copper prices has also eased the tightness in the market. The premium for cash copper over the three-month contract narrowed to $5 a ton on Thursday from $41 a day earlier. COMEX copper stocks, which had been inflowing due to tariff concerns, were last reported at 767,664 short tons, or 696,413 tons, as of Thursday.
The drop in copper prices has also affected other metals on the London Metal Exchange. Aluminium rose 0.29%, zinc gained 0.26%, lead was flat, nickel fell 0.25%, and tin dropped 0.73%. On the Shanghai Futures Exchange, aluminium fell 1.36%, zinc dropped 3.31%, lead rose 0.22%, nickel lost 1.71%, and tin slid 3.11%.
ING commodities analysts noted that the recent rally towards $15,000 had run ahead of fundamentals and that ruling out tariffs could send some US metal back to international markets. This uncertainty is expected to continue to influence market dynamics in the coming weeks.
The decision by the White House could significantly impact the future of metal shipments and the overall market sentiment. Market analysts are closely monitoring the situation as it unfolds.
