The price of the red metal increased on the London Metal Exchange, and futures surged by more than 5%. The currency settled at $930.98, its lowest level since last October.
By Sofía Pumpin
Copper had an upward session this Thursday. The price of the red metal on the London Metal Exchange reached $4.328 per pound, reflecting a 1.55% increase compared to Wednesday’s price, according to Cochilco.
However, the upward trend was even more pronounced in copper futures, which rose by more than 5%, with Comex reaching $4.81 by the close of this edition. As a result, the red metal hit its highest level in nine months, according to XTB Latam market analyst Emanoelle Santos.
Amid the sharp rebound of Chile’s main export product, the dollar fell by $15.39, settling at $930.98, its lowest level since October 14, 2024.
This comes in the context of the trade war driven by U.S. President Donald Trump and other factors, such as Asian demand for the metal.
Traders’ Race
For the founder and executive director of Plusmining, Juan Carlos Guajardo, the rise in the red metal reflects “a race among traders to secure physical shipments before potential tariffs take effect.”
Meanwhile, Juan Cristóbal Ciudad, senior market and industry analyst at Plusmining, added that since the U.S. announced tariffs on aluminum and steel, the price gap between the two exchanges has widened “due to the potential distortion introduced by tariffs on U.S. market prices, which must import part of its copper consumption from other countries, with Chile being a key supplier.”
Demand from China
Álvaro Merino, executive director of Núcleo Minero, recalled that China is one of the largest copper consumers, currently accounting for nearly 60% of global consumption.
Merino noted that China has announced stimulus measures to support its economy, and its authorities have maintained the 5% growth projection for 2025. “While these announcements are positive, caution is needed regarding their impact on medium- and long-term growth,” he estimated.
Additionally, China agreed to adopt a “more proactive” fiscal policy, meaning the fiscal deficit will rise from 3% in 2024 to 4% this year.
Merino pointed out that “the 5% growth target for this year, despite a more challenging external environment, is a clear sign of confidence and an early indication of stronger policy support for domestic demand.”
In his view, China’s measures “tend to boost copper demand, particularly in infrastructure and manufacturing.”
For Guajardo, meanwhile, the copper market today is affected by a delicate balance between uncertainty over potential U.S. tariffs and positive signals from the Chinese economy, as evidenced by stimulus announcements during the National People’s Congress meeting.
“The tariff threat has pushed traders to secure copper in advance to avoid higher costs. Additionally, economic support measures and strong demand growth in China have supported prices at this time,” Guajardo estimated.
Projections
So far this year, copper has risen by 10% on the London Metal Exchange.
Ciudad, from Plusmining, indicated that “greater volatility in copper prices is expected until it is confirmed whether tariffs will be introduced,” alongside adjustments in market positions in response to uncertainty.
If the Trump administration imposes tariffs, “domestic U.S. market prices are expected to continue rising, while globally, the impact will depend on how major exporters adapt,” Guajardo stated.
Among the negative consequences of a trade war, Ciudad explained, is the potential for “slowing the global economy, negatively affecting metal demand. This is why fiscal stimulus announcements from various countries are welcomed, as they can help support copper.”
Regarding copper price projections, Merino urged caution and advised waiting for developments in the U.S., particularly how the new tax program will be implemented and its implications for economic and fiscal growth.
He emphasized that, heading into 2025, factors such as the actions of the world’s two largest economies—China and the United States—could influence the price range of the commodity.
For Santos, from XTB Latam, in the medium and long term, the upward trend could continue due to growing demand driven by the energy transition, which will require large amounts of copper for sectors such as electric vehicles and transmission networks.
Source: Diario Financiero