FX.co ★ Copper Plunges from Recent Peaks

Copper futures fell to $4.6 per pound on Wednesday, retreating from the four-week high of $4.9 reached earlier this week. This decline is attributed to the US's threat to impose tariffs, which has already impacted global manufacturing demand. In an unexpected turn, China's official manufacturing PMI dropped to a 16-month low in April, with export orders plummeting to their lowest since 2022. This downturn reflects US consumers' hesitancy to maintain supply chains following President Trump's escalation of tariffs on China to 245%. Exporting goods had provided a temporary boost for Chinese manufacturers and copper smelters amidst weak domestic demand, allowing them to sell in foreign markets. However, the downward trend is mitigated by supply concerns in the US. President Trump's investigation into potential tariffs on copper imports threatens to strain the already limited smelting capacity, intensifying the competition for copper. This situation has widened the premium of US copper futures over comparable contracts on the London Metal Exchange, reigniting interest in the metric following its earlier volatility this month.