Copper prices stabilized around $14,000 per ton on Tuesday, after a recent decline that saw them hit their lowest close in four weeks. The commodity had rallied to a record high last week, reaching $14,875 per ton on September 10, but has since pulled back sharply, losing approximately 6%. This downturn was partly attributed to a Reuters report suggesting the White House was hesitant about imposing tariffs on refined copper, which had previously spurred traders to divert supplies to the US.
The market has also been influenced by macroeconomic factors. Hotter-than-expected US inflation data led traders to increase their bets on a Federal Reserve interest rate hike, strengthening the dollar and putting pressure on risk assets, including most other major metal contracts. Futures on the London Metal Exchange fell as much as 0.6% following their first weekly decline since June.
Adding to the easing of supply concerns, fresh deliveries of stockpiles to exchange-tracked warehouses signaled a loosening of a previous supply squeeze. LME warehouse stocks rose by 3.59% to 242,900 metric tonnes, and the spot-to-three-month spread flipped into a $67.50 per ton contango, indicating more available supply and reduced urgency for immediate purchases. Despite a marginal recovery on Tuesday, analysts suggest the near-term direction of copper prices hinges on external factors like the Fed's rate decision, the resolution of Section 232 tariff policy, and the sustained strength of the Yangshan copper premium, which bounced to $100 per ton.
