Copper Prices Retreat as Trade War Unnerves Markets

A couple of weeks ago, the price of copper was soaring as America stockpiled ahead of its recently announced tariffs. Major players like Trafigura and Mercuria even forecasted that prices could hit $12,000 per ton.

Following the announcement of the reciprocal tariffs by President Trump though, the red metal’s rally reversed into a fully-fledged crash, with investor concerns that the new tariffs will negatively influence global demand for copper increasing. The crash was further fueled by Beijing announcing that it’d levy a 34% tariff on all American imports starting April 10.

Shares for major mining firms like Rio Tinto, BHP Group, Freeport-McMoRan, and Southern Copper dropped by 6.4%, 9.5%, 13.1% and 9.6% respectively.

Figures from the London Metal Exchange also show that prices dropped by over 7% before slightly rebounding to $8375 per ton. Now, the red metal is piling up outside America, as demand continues to reduce.

It doesn’t help that Chile is preparing to reduce its 2025 price estimate for the metal. The country produced 24% of the copper globally in 2024, with customs data showing that China imported over 33,000 metric tons of copper from it last month.

This move by the South American country, which is the biggest producer of copper globally, is indicative of the increasing economic concerns worldwide. As of February, the country’s copper agency Codelco, held its price forecast at $4.25 per pound. This estimate was increased from its May 2024 forecast of $3.85.

Latest figures show that the metal’s price now averages between $3.90 and $4 per pound this year, which is considerably below its prior forecast. Juan Ignacio Guzman, the head of GEM, argues that prices could drop to as low as $3 per pound if the trade war sets off a recession. GEM is a mineral consulting firm based in Chile.

Analysts also warn that the worst is yet to pass, with the global head of commodities research at Citigroup Inc. Max Layton, noting that the current trade war could result in a significant market correction. He expects the price of the red metal to average $8500 this quarter, noting that there’s a risk the price may go even lower.

David Wilson, a strategist at BNP Paribas SA, agrees that the drop may continue in the short term. This opinion is shared by Goldman Sachs, which admits that the current environment could delay the metal’s expected shortage in supply. JPMorgan expects America to go into a recession this year.

Hopefully, the headwinds facing the copper market are short-lived so that the plans of entities like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) aren’t overly affected and investor interest remains high.

NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF

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