Copper extends losses on Trump tariff threats

Copper futures slipped below the $5 per pound mark on Monday, marking their third consecutive session of declines, as traders weighed the implications of escalating global trade tensions and potential disruptions to demand.

The retreat reflects growing investor caution following U.S. President Donald Trump’s latest warning that countries supporting what he called “anti-American policies on BRICS” could face an additional 10% tariff. The threat has reignited concerns over a potential slowdown in global trade and industrial activity—key pillars of copper demand—just as the market had begun to price in a tighter supply outlook.

The renewed geopolitical friction comes on the heels of a sharp rally that sent copper to a three-month high last week. That surge was largely driven by tightening global supply conditions and a flurry of preemptive buying, as exporters scrambled to redirect shipments to the U.S. in anticipation of new trade restrictions. The rush helped trigger notable drawdowns in visible copper inventories, with stockpiles at both the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) falling sharply in recent sessions.

While the fundamental supply picture remains tight—owing to production disruptions in Latin America and limited smelter capacity in Asia—analysts warn that macroeconomic uncertainty could quickly override physical market constraints.

If U.S. manufacturing activity softens or upcoming tariff announcements fall short of expectations, speculative long positions in copper could unwind rapidly, leading to further price pressure. Additionally, slower-than-expected economic activity in China, the world’s largest copper consumer, continues to weigh on sentiment, particularly as Beijing grapples with weak property investment and subdued industrial output.

Traders are now eyeing several key data releases later this week, including U.S. inflation and Chinese trade figures, which could provide clearer direction for both monetary policy and global commodity demand. In the meantime, copper prices are likely to remain volatile, caught between resilient supply fundamentals and a murky macroeconomic and policy backdrop.