Copper futures climbed nearly 1% to around $4.65 per pound on Monday, building on gains from the previous session as easing US-China trade tensions lifted risk sentiment across global markets.
Copper gains on US-China trade deal hopes
Over the weekend, trade representatives from both countries met in Switzerland and reported substantial progress in negotiations, including preliminary commitments to reduce tariffs over a 90-day period. A joint statement is expected later today, potentially outlining these initial agreements, which investors hope will pave the way for a broader, longer-term resolution to the trade dispute.
The renewed optimism provided relief to copper markets, which had come under heavy pressure in April amid heightened fears of a global economic slowdown triggered by the sweeping 145% US tariffs on Chinese imports. The metal, often seen as a bellwether for global economic health, was weighed down not only by weaker demand expectations but also by a surge in supply. Robust ore production from South America, especially from Chile and Peru, contributed to an oversupplied market, while the International Copper Study Group recently doubled its forecast for this year’s surplus to nearly 300,000 tonnes, further undermining prices.
Near-term support to copper from trade news
Nevertheless, the latest trade truce and signs of stabilizing global manufacturing sentiment are providing near-term support to copper, particularly as easing tariffs could revive industrial activity and bolster demand in China, the world’s largest copper consumer. Still, analysts caution that structural headwinds remain, with global inventories rising and the risk of short-covering rallies driven by speculative positioning rather than fundamental improvements in physical demand. Market participants are now awaiting China’s upcoming credit and fixed-asset investment data for further clues on the country's industrial outlook.
