Copper futures in the United States fell to below $4.6 per pound on Thursday, aligning with declines in other base metals due to heightened risks to manufacturing demand, which intensified the effects of ample copper supply. The industrial inputs experienced a pullback as bond yields surged following the Federal government's progression toward passing a bill that would increase the budget deficit. This comes in the wake of warnings from rating agencies about the unsustainable expansion of US debt.
Meanwhile, robust ore output from South America led the International Copper Study Group to double its surplus forecast for this year to nearly 300,000 tonnes. As a result, the growing risks of an oversupply prompted foreign traders to close long positions on US copper futures. These positions were primarily maintained after the Trump administration announced an investigation into potential tariffs on copper imports. This development coincided with a significant rise in US copper inventories, as metal returned to the United States to help factories shield themselves from potential tariff risks, thereby narrowing the spread between US and London copper futures.
