Key Moments
- LME copper slipped back below $14,000/t after gaining around 3% over the prior two sessions.
- Rising US-Iran tensions, softer global growth expectations, and higher energy costs weighed on demand sentiment and encouraged profit-taking.
- The US revised its metals tariff framework, broadening coverage to more copper products while easing rules of origin and reviewing potential duties on refined copper imports.
Macro Uncertainty Triggers Copper Price Pullback
ING Commodities Strategists Warren Patterson and Ewa Manthey report that copper prices reversed part of a recent rally, with London Metal Exchange (LME) copper falling back below $14,000/t. The metal had climbed roughly 3% over the previous two sessions before the move lower.
According to the strategists, heightened geopolitical tensions between the US and Iran shifted market focus toward demand risk. Alongside this, profit-taking after the recent upswing contributed to increased short-term volatility in prices.
Demand Concerns and Supply Risks Shape Sentiment
The strategists highlight that, even as supply-side risks persist, a weaker macro backdrop has started to dominate trading behavior. Concerns around global growth, elevated energy costs, and inflation weighed on sentiment, tempering enthusiasm that had been driven by expectations of tighter supply and possible changes in US trade policy.
The recent rally in copper prices had been underpinned by expectations of a tighter market in advance of potential US import tariffs, but the latest pullback indicates that macro headwinds are currently overshadowing these supply considerations.
Revisions to US Metals Tariff Framework
The report notes that the US has adjusted its metals tariff structure, maintaining higher tariffs on selected copper products while expanding tariff coverage to more downstream items. At the same time, rules governing product origin have been relaxed.
| Policy Area | Change Described |
|---|---|
| Tariffs on certain copper products | Maintained at elevated levels |
| Coverage of downstream goods | Tightened and broadened to additional semi-fabricated products |
| Rules of origin threshold | Lowered from 95% to 85% to qualify as US-origin metal |
| Scope of tariffed products | Extended to include items such as electrical conductors and cables |
The strategists explain that the threshold for qualifying as a US-origin metal was reduced from 95% to 85%, making it simpler for importers to obtain preferential treatment. At the same time, the scope of tariffs was widened to cover more semi-fabricated copper products, including electrical conductors and cables, effectively extending protection deeper into manufacturing supply chains.
Focus Turns to Review of Refined Copper Imports
ING notes that market participants are now watching the ongoing US review of refined copper imports. The strategists emphasize that any new duties on refined copper could exert a more pronounced influence on US supply conditions, given the country’s significant dependence on imported refined metal.
Supportive Long-Term Fundamentals vs Near-Term Risks
Despite the recent price weakness, Patterson and Manthey describe the broader copper market backdrop as generally constructive. They point to tariff-driven trade distortions and structural demand trends related to electrification and grid infrastructure as supportive factors.
However, they caution that copper’s short-term trajectory is likely to remain closely tied to macro developments. In their view, continuing uncertainty in the Middle East, including US-Iran tensions, is acting as a headwind for prices even as longer-term fundamentals remain broadly favorable.
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