A shift in geopolitical tone has reignited investor confidence in copper, fuelling a rally that could signal broader momentum for industrial metals. The market is reacting swiftly to changing signals from the US, where remarks from key policymakers have taken a conciliatory turn. This evolving narrative is pushing copper to its highest levels in weeks, catching the eye of investors hungry for signs of economic resilience and opportunity.
Copper prices touched a three-week high on Wednesday, buoyed by a thaw in trade tensions between the United States and China. The benchmark copper contract on the London Metal Exchange climbed to $9,481.50 per metric ton at its peak, before settling slightly lower at $9,379. This marks a sharp rebound of over 15% from earlier this month, when copper slumped to a 17-month low of $8,105. The rebound reflects a sentiment shift driven less by fundamentals and more by politics and policy signals.
US President Donald Trump, known for his aggressive stance on trade, hinted at potential tariff reductions on Chinese imports—China being the largest consumer of copper globally. Reinforcing the message, US Treasury Secretary Scott Bessent noted that a trade deal with China could result in a “substantial” reduction of tariffs. These comments have been interpreted as olive branches to Beijing and are viewed as potentially bullish for global trade and industrial activity.
Market participants are closely watching these developments. One trader observed that copper’s rise was less about supply-demand dynamics and more a reaction to verbal cues from Washington. The softening of Trump’s attacks on Federal Reserve Chair Jerome Powell, particularly his decision to step back from calls to remove Powell, has also improved sentiment across financial markets. Stability at the Fed suggests less policy volatility ahead—an encouraging sign for commodities and risk assets.
Despite the optimism, not all analysts are convinced the rally has legs. Commerzbank cautioned that the copper market is still facing a supply surplus, referencing recent data from the International Copper Study Group. Their bulletin highlighted a surplus in February, pointing to potential headwinds for sustained price growth. The bank advised a measured outlook, suggesting that prices may face resistance without a clear shift in underlying fundamentals.
Other base metals joined copper in its upswing. Aluminium jumped 2% to $2,428.50 per ton, zinc advanced 2.1% to $2,649, lead increased 1.2% to $1,946, and tin rose 1% to $31,440. Only nickel bucked the trend, easing by 0.5% to $15,610 per ton. This broad-based strength in industrial metals suggests a broader resurgence of investor interest in the commodities complex, likely driven by hopes of easing trade restrictions and stronger manufacturing activity ahead.
As the global economy navigates the complex landscape of tariffs and central bank policy, copper is re-emerging as a bellwether for industrial growth and investor confidence. While the fundamentals may currently take a backseat, the narrative surrounding trade and policy remains a potent catalyst for short-term price movements.
ARC Minerals Ltd (LON:ARCM) is a dynamic exploration and prospect generation company, forging partnerships with major mining companies, in its quest to discover and develop Tier 1 copper deposits.
