Market Turmoil: Copper Prices Plummet Amid Trade Concerns

Copper declined by as much as 4.3% during a widespread selloff on the London Metal Exchange, reflecting sharp losses in the Chinese yuan.

The metal also dropped 4.6%, settling at $9,389 a tonne during early morning trading on the Comex in New York.

[Click here for an interactive chart of copper prices]

In addition to the immediate effects of a weaker currency in the world’s largest commodities market, traders are on alert for a potential drop in demand if Trump acts on his threats to escalate the US-China trade war.

“This situation could lead to new tariffs on imported goods, particularly focusing on China, which may cause further trade tensions and economic disruptions,” explained Ole Hansen, head of commodity strategy at Saxo Bank.

The stock prices of steel companies surged as much as 12%, marking the largest intraday rise since March 2020. This jump stems from expectations that Trump, if re-elected, will prioritize tariffs on steel imports, a key focus during his previous administration.

Investors are also considering the possibility that Beijing might introduce stimulus measures to boost domestic demand, noted Marcus Garvey, head of commodities strategy at Macquarie.

(With files from Reuters and Bloomberg)