Copper futures just broke records, but what does mean for metals, the market and the macro-outlook.
If you haven’t traded copper before, it seems to be where the action is at.
It’s in the headlines this week because the price spiked on another political tailwind provided again by President Donald Trump.
The Headline That Lit the Fuse
Yesterday, Donald Trump dropped another tariff bomb, a proposed 50% duty on imported copper, targeting key producers like Chile, Peru, and Canada.
The move is a way to ‘protect American miners’ according to the US President.
Copper futures spiked over 18%, touching all time highs as concerns over coppers supply was circulated.
Trump aims to boost domestic production of the metal to reduce the US’s reliance on imports. With such a strong tariff the US President aims to increase and encourage development of mining operations.
Whether this will encourage new mining operations will be yet to be seen.
Momentum to continue or fade?
The big question now, is copper’s explosive move the start of a sustained rally, or just a politically driven rally?
In the short term, momentum could hold as exporters rush to beat the tariff deadline and U.S. buyers scramble to secure supply.
But once the policy kicks in and stockpiles start to build, we may see demand soften and prices could pullback.
Traders should be wary of chasing stretched moves without confirmation.
If momentum fades, the post-tariff landscape could look very different.
