Copper futures dropped more than 2% to around $4.70 per pound on Tuesday, reversing strong gains from the previous session, as fresh economic data from China—the world’s top copper consumer—cast renewed doubts over demand prospects.
Copper tumbles as China factory data disappoints
The decline followed the release of a private survey showing that China’s manufacturing activity unexpectedly contracted in May, hitting its lowest level in more than two years. The downturn underscored the deepening strain on the industrial sector, with new export orders falling sharply amid continued pressure from U.S. tariffs and weakening global demand.
The disappointing figures echoed Saturday’s official PMI data, which also showed factory activity shrinking for a second consecutive month, reinforcing the narrative of a broad-based slowdown in China’s manufacturing engine. Such developments are particularly concerning for copper, which is heavily used in construction, electrical infrastructure, and manufacturing—all sectors highly sensitive to economic cycles.
Growing volatility ahead for copper
Tuesday’s pullback came after copper prices had surged by 5% on Monday, driven largely by geopolitical risk premiums and fears that copper might become a new front in escalating U.S.-China trade tensions. Market anxiety was further fueled by U.S. President Donald Trump’s threat to double tariffs on steel and aluminum imports to 50%, and an ongoing U.S. investigation into whether copper imports pose a national security risk—raising the possibility of new trade restrictions.
Traders and analysts now see growing volatility ahead for copper, as geopolitical concerns mix with signs of slowing real demand. Although longer-term fundamentals remain supported by the global energy transition and increasing demand from the electric vehicle and renewable energy sectors, short-term sentiment is being driven by macroeconomic and policy uncertainty. With China’s construction and industrial sectors showing signs of fatigue and the U.S. signaling a more aggressive stance on trade, copper markets may face further downside risk unless there is a tangible rebound in economic activity or a de-escalation in trade hostilities.
