Copper futures fell below $4.20 per pound on Wednesday, reaching their lowest point in three weeks, as escalating tariff threats from US President Donald Trump continued to weigh heavily on market sentiment.
Copper hits three-week low
Earlier this week, Trump unveiled plans to impose tariffs on a range of imports, including chips, pharmaceuticals, steel, aluminum, and copper, in an effort to stimulate domestic production. This move has raised concerns among traders about potential disruptions to global supply chains and its long-term impact on copper demand. The market remained on edge as investors also braced for the February 1 deadline for the first round of US tariffs targeting China, the world’s largest copper consumer. The uncertainty surrounding the tariffs has led to increased caution, particularly as the metal is heavily influenced by China’s economic activity.
China is a concern for traders
Further compounding the bearish outlook, recent data showed that Chinese manufacturing activity unexpectedly contracted in January, signaling a potential slowdown in industrial production. With China being such a significant player in the copper market, any signs of weakening demand are particularly concerning for traders. Adding to the uncertainty, Chinese markets are currently closed for the week-long Lunar New Year holiday, which is expected to keep trading volumes lower than usual. As a result, market participants are closely monitoring geopolitical developments and any signs of shifts in global demand that could further influence copper prices in the coming weeks.
