Copper futures declined toward $4.20 per pound on Monday, marking their lowest level in over three weeks, as escalating trade tensions and global economic uncertainty fueled a broad selloff in risk assets.
Copper market starts week on a declining note
The fresh wave of concerns was triggered by new US tariffs, with President Donald Trump imposing a 25% levy on imports from Mexico and Canada and a 10% tariff on Chinese goods. These measures prompted immediate retaliatory actions from the affected nations, intensifying fears of prolonged trade disruptions, weaker economic growth, and renewed inflationary pressures.
Eyes on Fed moves
Investors are now reassessing their expectations for US monetary policy, with the likelihood of fewer Federal Reserve rate cuts this year, which could further weigh on industrial metals. A stronger US dollar, which makes commodities like copper more expensive for international buyers, added to the bearish sentiment.
Chinese effect
In China, the world’s largest consumer of copper, a private survey showed that manufacturing activity expanded at a slower-than-expected pace in January, with foreign orders contracting amid persistent global trade uncertainties. The data raised concerns over future demand for industrial metals, particularly as China’s property sector—a major driver of copper consumption—continues to face structural challenges.
While Chinese markets remain closed for the Lunar New Year holidays, trading is set to resume on Tuesday, with investors closely monitoring any signals of further government stimulus to support economic growth. Looking ahead, the upcoming US inflation report and industrial production data from major economies will be key indicators shaping copper’s price trajectory in the near term.
