On Monday (June 2, local time), copper prices soared nearly 6%, driven primarily by two factors: investor concerns over potential U.S. tariffs on industrial metals and a weakening U.S. dollar. The rally was directly triggered by former President Donald Trump’s announcement on Friday, in which he revealed plans to double tariffs on steel and aluminum to 50%, effective this Wednesday.
This threatening statement has stoked market fears about the fate of copper products, as reports suggest the Trump administration is considering adding copper to the list of goods facing higher tariffs. In response, copper prices jumped in both London and New York markets. As of 07:06 GMT, the three-month copper benchmark contract on the London Metal Exchange (LME) rose 0.7% to $9,572 per ton. Meanwhile, July copper futures on the COMEX surged 5.8% to $4.94 per pound (equivalent to $10,887 per ton). Chinese commodity markets were closed on Monday due to the Dragon Boat Festival holiday.
The U.S. dollar index edged lower during the same period as markets assessed the potential economic growth and inflation risks stemming from Trump’s latest tariff proposal. An official survey released on Saturday showed that China’s manufacturing activity contracted for the second consecutive month in May, reinforcing expectations that the Chinese government may introduce more economic stimulus measures amid ongoing U.S.-China trade tensions.
Tom Price, an analyst at Panmure Liberum, noted, “While Trump’s latest remarks made no mention of copper whatsoever, the market has clearly priced in the risk of import tariffs following February’s investigation.” He was referring to Washington’s ongoing review of potential new tariffs on imported copper.
Morgan Stanley stated in a report that the current premium on COMEX copper futures will likely continue to attract inflows of the metal into the U.S., thereby reducing overseas stockpiles and sustaining tight conditions in global markets. The investment bank estimates that the U.S. has imported an additional 200,000 tons of copper over the past eight weeks.
Year-to-date, COMEX copper futures (near-month contract) have climbed 21.29%, with Monday’s closing price up 3.37% compared to the same period last year. However, they remain 7.31% below the all-time peak of $5.216 reached on March 26 this year.
