FX.co ★ Copper Stabilizes as Traders Weigh US-China Truce

Copper futures stabilized at approximately $4.60 per pound on Tuesday, after experiencing volatility at the week's outset as investors evaluated the broader economic effects of the temporary trade agreement between the US and China. This deal, secured during weekend negotiations in Switzerland, involves a mutual reduction in tariffs to 30% and 10% respectively over a 90-day period, providing a short-term easing of trade tensions but leaving questions about future developments. Despite this temporary relief, concerns remain about an oversupply in the market. Extensive ore production from South America has intensified the surplus outlook, with the International Copper Study Group recently increasing its 2024 surplus projection to nearly 300,000 tonnes. These rising risks of an oversupply have led many international traders to reduce their long positions in US copper futures—positions initially entered into after President Trump's announcement of an investigation into potential copper import tariffs.