FX.co ★ Copper Holds Recent Pullback

Copper futures in the United States dropped below $4.58 per pound on Tuesday, continuing the decline from the previous week. This drop was largely due to a plentiful supply of the metal in North America, which eliminated the premium of copper in U.S. commodity markets. Robust ore production in South America led the International Copper Study Group to revise its surplus forecast for the year to nearly 300,000 tonnes. This increase in surplus raised concerns about an oversupply, prompting international traders to liquidate long positions in U.S. copper futures—positions initially held after Trump's announcement of a potential tariff investigation on copper imports. This scenario occurred alongside a significant rise in domestic copper inventories and a reduction in LME inventories, as the metal returned to the U.S. market, allowing factories to guard against tariff threats. This movement narrowed the price difference between U.S. and London copper futures. While the White House has recently initiated trade discussions with key partners, the Department of Commerce's tariff investigation into copper imports remains ongoing.