Due to the potential increase in U.S. trade tariffs following Trump’s administration and weaker-than-expected stimulus measures from China, there is a high likelihood that demand for copper will be under pressure. Consequently, Citigroup has lowered its short-term copper price forecast by 11%. Citigroup expects that over the next three months, copper prices will drop from the previous forecast of $9,500 per ton to $8,500 per ton. Since the end of September, copper prices have already fallen by nearly 10%.
Analysts at Citigroup wrote in a report, “Donald Trump’s election marks a significant turning point in global trade tariff policy. We are surprised that China has not eased its policies so far.”
The recovery of the U.S. dollar has contributed to the decline in copper prices. A stronger dollar typically puts pressure on commodities priced in dollars. It is expected that the overseas market will continue to release risk in the short term, and the strength of the dollar index will suppress the trend of copper prices. On Wednesday (November 13), the indicator measuring the strength of the dollar against a basket of currencies rose, continuing its recent gains driven by the U.S. election, following stable inflation data in the U.S. for October.
A manager at Eagle Metal International Pte indicated that for copper demand to recover, China needs to implement more economic stimulus measures. The company handles approximately 10% of China’s refined copper imports.
From a technical perspective, copper prices are expected to remain weak in the short term, facing significant risks from tightening overseas liquidity.
On Wednesday, copper futures on the London Metal Exchange fell after the so-called core Consumer Price Index (excluding food and energy costs) rose by 0.3% for the third consecutive month.
As of 3:38 PM London time, copper futures on the London Metal Exchange declined by 1.1% to $9,038.00 per ton. Prices for aluminum and nickel also dropped, while zinc prices increased.
