Copper futures fell to $4.60 per pound on Thursday, retreating from two-week highs as renewed concerns over a tariff-driven global slowdown weighed heavily on sentiment.
Copper pulls back on global growth worries
After a sharp rebound earlier in the week, selling pressure returned as investors reassessed the risks posed by escalating trade tensions and their potential impact on global industrial demand. Copper, widely seen as a bellwether for economic health due to its broad applications in manufacturing and construction, remains highly sensitive to changes in growth expectations.
Market uncertainty was stirred further by a White House statement suggesting that some Chinese goods could face tariffs of up to 245%, encompassing both existing and newly proposed levies dating back to President Trump’s first term. The prospect of such steep tariffs reignited fears of retaliatory measures from China, heightening worries over disrupted supply chains, rising input costs, and weaker global demand for raw materials — all of which could negatively affect copper consumption.
Updates on trade war
While China has signaled a willingness to reengage in trade negotiations, reports suggest that Beijing is seeking specific conditions before any substantive talks can resume. Chinese officials are reportedly demanding greater respect during discussions, clearer and more consistent policy direction from Washington, and the appointment of a U.S. negotiator with full and explicit backing from President Trump. These demands highlight deep-rooted mistrust between the two sides, suggesting that a near-term resolution to the trade dispute remains challenging.
Meanwhile, Federal Reserve Chair Jerome Powell added to the cautious market tone, warning that new tariffs could exacerbate inflationary pressures while simultaneously dampening economic growth — a difficult scenario for the Fed's dual mandate of promoting price stability and maximum employment. Powell reiterated that the central bank is not in a hurry to cut interest rates, emphasizing the need for more comprehensive data before adjusting policy. His remarks reinforced expectations that monetary easing, if it comes, will be gradual and data-dependent rather than preemptive.
Industrial metals under pressure
In the broader commodities space, industrial metals were broadly under pressure as traders weighed the implications of sustained trade friction and a slower global recovery. Although copper fundamentals remain supported by long-term trends such as electrification and green energy investment, short-term risks tied to policy uncertainty and macroeconomic headwinds have kept price action volatile.
Looking ahead, traders will be closely monitoring developments in trade negotiations, macroeconomic indicators, and central bank commentary for further clues about the health of the global economy — key drivers for copper demand and price direction in the coming months.
