Copper prices soared to their highest levels in over two months on Friday, fueled by increasing investor optimism regarding a potential trade deal between the U.S. and China following comments from President Donald Trump.
Key Highlights:
Current Copper Prices:
Three-month copper (CMCU3) on the London Metal Exchange (LME) rose 0.4%, reaching $9,270 per metric ton by 1700 GMT.
Prices peaked at $9,355.50, the highest since November 12.
Trump’s Remarks:
In a recent interview, Trump expressed a preference against imposing tariffs on China, indicating that a trade deal with the world’s second-largest economy was feasible.
His call for lower interest rates contributed to a decline in the dollar index (DXY), which is on track for its largest weekly drop in over a year.
Impact of a Weaker Dollar:
A weaker U.S. dollar makes dollar-priced commodities cheaper for international buyers, boosting demand.
Market Outlook:
Despite the current optimism, analysts warn of limited short-term upside for copper and other base metals. Carsten Menke, an analyst at Julius Baer in Zurich, noted that the dynamics surrounding the tariffs may complicate negotiations.
Menke stated, “Our base case is that the tariffs are not about ramping up the U.S. fiscal position or about fair trade; it’s really about achieving other goals.”
Trade Data Insights:
Recent trade data indicates that U.S. companies have increased their imports from China, anticipating potential price hikes due to tariffs. This could lead to a slowdown in industrial production in China in the early months of the year.
Other Metals Performance:
Nickel (CMNI3) dipped 0.2% to $15,630 per ton after Indonesia announced a higher mining quota for 2025, alleviating supply concerns.
Aluminium (CMAL3) rose 0.5% to $2,637 per ton.
Tin (CMSN3) gained 0.9% to $30,170.
Zinc (CMZN3) fell 0.7% to $2,828.
Lead (CMPB3) decreased 0.5% to $1,940.