Copper prices surge nearing all-time high due to tariffs

Copper prices are climbing toward a record high due to concerns over potential tariffs from former President Donald Trump and new stimulus measures from China. The rising cost comes as the US dollar weakens, making copper more attractive for investors. So far this year, copper prices have increased by 27%. Last Thursday, copper futures reached $5.15 per pound, close to the record set in May 2024. However, prices dipped slightly to $5.12 per pound during Monday's trading session in Asia. Copper is essential for many industries, especially in electrification, battery-powered vehicles, and renewable energy. At the same time, supply issues have arisen because of reduced investment and lower refining capabilities. Analysts suggest that the combination of higher demand, potential tariffs, and the weak dollar are fueling the price surge. Last month, Trump signed an order to investigate copper imports to protect US economic interests. The order is seen as a step toward imposing tariffs, which would challenge China's control over the copper market. Following this announcement, copper futures jumped around 12%, as traders anticipated tariffs and rushed to ship copper to the US. In China, the government is working to boost economic growth, setting a GDP target of 5%. They plan to expand domestic consumption and support household spending. Recent data shows a 4% increase in retail sales, marking the fastest growth since October last year. As the world's largest copper supplier and consumer, China's economic plans are significant for global copper prices. Their initiatives, combined with the recent positive economic news, have contributed to a 4.4% rise in copper futures last week. Moreover, the US dollar has weakened against other major currencies, decreasing its value by 4% this year. This decline is linked to rising tensions in global trade and expectations of slower US economic growth. A weaker dollar typically increases commodity prices, including copper, and is considered a key factor in the current price rise.