Copper futures in the US surged to $4.90 per pound in late April, marking the highest level since the beginning of the month and extending gains to over 20% since the US government suspended its aggressive round of reciprocal tariffs on April 9th.
Copper surges over 20% in April
The sharp rally reflects a combination of easing macroeconomic concerns and tightening supply expectations, particularly within the United States. Sentiment across the industrial metals market improved notably after the White House postponed the implementation of new tariffs by 90 days, signaling a more measured trade stance and providing temporary relief to global manufacturers already under pressure from weak demand and high input costs.
The delay in tariffs, alongside exemptions granted to automakers—one of the largest industrial consumers of copper—helped ease fears of a sudden contraction in copper demand. These developments calmed worries about a near-term recession in the US and allowed risk appetite to return to commodity markets, as investors bet on a potential rebound in global manufacturing activity, particularly in Asia and Europe. Data showing stabilization in factory orders and new export demand contributed to the bullish momentum.
Support from geopolitical and supply-side risks
Simultaneously, copper prices received additional support from geopolitical and supply-side risks. President Trump’s announcement of a new probe targeting strategic copper imports raised the specter of fresh tariffs on select sources, which would strain an already tight domestic supply chain. The US is heavily reliant on imported copper for refined use, and its limited smelting and refining capacity leaves it vulnerable to any disruption. The prospect of restricted inflows sparked a wave of preemptive buying and intensified bidding activity among traders and manufacturers, further elevating futures prices.
Premium of US copper futures widening
These dynamics widened the premium of US copper futures relative to comparable contracts traded on the London Metal Exchange (LME), reviving a trend that had seen significant volatility earlier in April. The growing spread between US and international benchmarks reflects not only supply concerns but also speculation-driven demand as market participants position for a prolonged period of constrained availability. With inventories remaining low and infrastructure spending staying robust, copper's outlook remains supported despite lingering global uncertainties.
