Copper futures have risen sharply, surpassing $5.10 per pound, edging close to the record set in May of last year. This increase is driven by concerns over supply and uncertainties surrounding trade policies. Notably, the premium for US copper over its LME counterpart has reached nearly unprecedented levels. This development stems from anticipation that President Donald Trump may impose a 25% tariff on copper imports later this year. As a result, traders are redirecting shipments from Asia to the US to take advantage of higher prices and mitigate the potential impacts of the tariffs.
Meanwhile, demand from China, the largest consumer of copper, remains robust. This is supported by an uptick in manufacturing activities and government commitments to expanded deficit spending aimed at stimulating the economy. Additionally, on the geopolitical stage, Chinese Premier Li Qiang called for increased market openness to counteract rising global instability during the China Development Forum in Beijing on Sunday.
