The price of copper, which had experienced an almost 8% increase this year due to strong physical market demand, faced a downturn as Citigroup Inc. raised alarms over the impact of US tariffs. On the London Metal Exchange (LME), copper initially reached a three-month high earlier in the week. However, recent forecasts suggest that while prices might hold steady around $9,400 per ton until early April, they could drop to $8,500 within the next three months if the tariffs take effect.
According to Citigroup’s analysts, including Tom Mulqueen, the spread between Comex and LME copper prices could widen significantly. Currently, the difference stands at over $800 per ton, but it may expand to $1,400 per ton. This potential increase is attributed to the tariffs making copper more valuable within the United States, potentially disrupting current market dynamics.
In trading, copper experienced a 0.4% decline, settling at $9,438.50 per ton on the LME during morning trading in Shanghai. Meanwhile, the performance of other base metals varied, with some posting gains and others showing losses.
In related news, ferrous markets such as iron ore futures in Singapore held their ground at about $106.60 per ton, reflecting a relatively stable market. Yuan-priced futures in Dalian remained flat, while steel contracts in Shanghai experienced slight upward movement.
The copper market faces a potentially volatile period as the impacts of US tariffs become clearer. While current prices may remain stable in the short term, significant shifts in market value could occur if tariffs are implemented, which would affect global demand and pricing structures.
