Copper: Pullback on macro and tariff risks – ING

§ 01 Executive Snapshot

• What: Copper prices have retreated below $14,000/t due to macroeconomic concerns and tariff risks.
• Who: ING's Commodities Strategists Warren Patterson and Ewa Manthey reported on the situation.
• Why it matters: The fluctuations in copper prices reflect broader economic uncertainties and tariff policies, impacting demand expectations and supply dynamics.

§ 02 Key Developments

• LME copper prices fell back below $14,000/t after gaining around 3% in the previous two sessions.
• US-Iran tensions and macro concerns are creating volatility in copper demand expectations.
• The US maintained elevated tariffs on certain copper products while easing rules of origin from 95% to 85%, allowing easier access for importers.

§ 03 Strategic Context

• Ongoing supply risks and tariff-driven trade distortions are affecting copper market dynamics, influenced by geopolitical tensions.
• The structural demand for copper is linked to electrification and grid investment, which supports long-term market fundamentals despite short-term volatility.

§ 04 Strategic Implications

• The immediate consequence of these developments is increased volatility in copper prices, influenced by macroeconomic risks.
• Long-term, the structural demand for copper due to electrification and grid investments may sustain prices despite short-term fluctuations driven by tariffs and geopolitical risks.

§ 05 Risks & Constraints

• Potential risks include further adjustments in US tariff policy that could impact supply dynamics significantly.
• Competition from alternative materials and global economic conditions may also pose risks to copper demand and pricing.

§ 06 Watchlist / Forward Signals

• Market attention will focus on the ongoing review of refined copper imports and any additional duties that may arise.
• Future developments in US tariff policy and geopolitical tensions, particularly in the Middle East, will signal potential price movements in copper markets.