Key Takeaways
- Copper prices declined, extending losses from last week.
- Uncertainty over potential US tariffs on refined copper continues to affect the market.
- Analysts remain cautious and bearish on copper in the near term.
Copper prices fell on Monday, continuing a trend of losses from the previous week, as uncertainty over potential US tariffs on refined copper persisted. The benchmark three-month copper price on the London Metal Exchange dropped 0.20% to $14,212 per metric ton by 0313 GMT, while the most-traded copper contract on the Shanghai Futures Exchange fell 0.39% to 108,240 yuan ($16,139.57) per metric ton.
The decline in copper prices came after a report by Reuters that the White House had yet to decide whether to impose tariffs on refined copper imports. Officials are weighing higher manufacturing costs against efforts to encourage more domestic supply. Analysts at Chinese broker Everbright Futures stated that traders remain focused on the Section 232 tariff decision, which is expected to be announced on September 28.
The uncertainty surrounding the tariff decision has increased caution among traders, leading to a bearish outlook on copper in the near term. COMEX copper lost more than 4% last week, and stocks in COMEX warehouses declined for the first time since mid-June, slipping 0.02% to 767,504 short tons, or 696,268 metric tons. US exchange stocks had risen steadily amid tariff-driven inflows into the country.
Broader market sentiment was weak, with Asian equities falling and oil prices rising more than 2% due to renewed Middle East supply concerns, adding to inflation worries ahead of US Federal Reserve and Bank of Japan policy meetings this week. The broader base metal market faced pressure, with aluminium rising 0.29%, nickel gaining 0.10%, zinc falling 0.53%, lead dropping 0.74%, and tin losing 0.64% on the LME.
On the Shanghai Futures Exchange, aluminium fell 0.50%, zinc dropped 1.40%, lead declined 1.79%, nickel lost 0.72%, and tin tumbled 3.04%. Analysts at Everbright Futures noted that shifts in the White House’s stance have increased uncertainty over the inventory arbitrage trade, leaving the market cautious and bearish on copper in the near term.
The decline in copper prices reflects the ongoing economic uncertainties, particularly the potential impact of US tariffs on the global market. Traders are closely monitoring the outcome of the Section 232 tariff decision, which could significantly influence the future direction of the copper market.
