Copper prices dropped below $9,000 per ton in a significant decline not seen since March 2020 due to concerns arising from an escalating trade war, leading to a sharp selloff in metal and mining stocks.
The prominent metal experienced a 6.3% decrease, settling at $8,780 per ton in London on Friday, with losses intensifying throughout the industrial metals markets following a substantial drop on Thursday. Copper prices on the New York Comex also fell sharply, marking the most substantial two-day decline since 2011. Nickel prices on the London Metal Exchange reached their lowest point since 2020.
These declines were triggered by reports from China's Xinhua News Agency indicating that Beijing would impose a 34% tariff on all imports from the US, effective from April 10. Major mining firms like Freeport-McMoRan Inc. and Teck Resources Ltd. experienced over a 10% decline in their stock prices.
This sudden reversal in copper trading sentiment contrasts with the previous focus on positive supply impacts due to global efforts to export copper to the US before targeted tariffs were implemented. However, with the introduction of trade barriers by the US, attention is now shifting towards the potential impact on demand in the US and other regions.
While maintaining a long-term bullish outlook on copper, Goldman Sachs Group Inc. warned that reduced global GDP and copper demand growth could postpone the anticipated market deficit this year.
LME copper prices plummeted by more than 10% during the week, marking the most significant decline since the onset of the pandemic in March 2020. Comex copper prices also fell by 8.6% to $4.412 per pound in New York.
In addition to copper, aluminum continued its downward trend for the 12th consecutive day, while nickel decreased by 6.2% to settle at $14,758 per ton, the lowest level since October 2020. Tin prices also dropped, erasing gains made earlier in the week fueled by concerns about supply disruptions. Notably, Chinese markets were closed on Friday due to a public holiday.
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