Copper: Tariff threats keep the metals markets on edge – ING

Copper dropped below $8,000/t in yesterday’s trading session after US President Donald Trump’s latest in a series of tariff threats, ING’s commodity analysts Ewa Manthey and Warren Patterson note.

Metals markets are turning nervous about the prospect of tariffs

“Trump said on Monday that he plans to impose tariffs on Copper, Aluminum and steel, as well as computer chips and pharmaceuticals, to boost domestic production. Trump also said on Monday evening that he wants to impose across-the-board tariffs that are “much bigger” than 2.5%. When asked about a report that incoming Treasury Secretary Scott Bessent favored starting with a global rate of 2.5%, Trump said he didn’t think Bessent supported that and wouldn’t favor it himself. He added he wanted a rate ‘much bigger’ than 2.5%.”

“Metals markets are turning increasingly nervous about the prospect of tariffs. According to the US Geological Survey (USGS), the US has a net import reliance of 13%, 44% and 46% for iron & steel, Aluminum and Copper, respectively. A prolonged trade conflict would slow global growth and hurt demand. Tariffs are a major headwind to metals, whether in force yet or not.”

“The latest LME COTR report shows that speculators increased their net long position in Aluminum by 5,269 lots for a second consecutive week to 117,876 lots for the week ending 24 January, the highest since the week ending on 15 November 2024. Similarly, net bullish bets for Copper rose by 3,507 lots for a fourth consecutive week to 67,624 lots (the highest since the week ending 8 November 2024) at the end of last week. In contrast, money managers decreased net bullish bets for zinc by 651 lots to 28,853 lots as of last Friday.”