Market Outlook: Copper Drops Amid Strong Dollar and Trump's Tariff Plan

Copper prices dropped due to the strengthening US dollar and the promise made by elected US President Donald Trump to impose higher tariffs on Chinese products. At the London Metal Exchange (LME), the three-month copper contract was trading at $9,010.50 per ton, down 0.4% at 07:42 GMT, while at the Shanghai Futures Exchange (SHFE), the January copper contract fell 0.1% to 73,900 yuan per ton ($10,187.48).

Trump stated yesterday that from his first day in office, he would impose a 10% additional tariff on goods from China and a 25% tariff on all products from Mexico and Canada. The proposed tariffs are likely to harm economic growth and disrupt trade flows, which could ultimately reduce metal consumption.

A broker noted that the decline in metal prices is marginal, as the market has already reacted to Trump’s tariff plans following his victory in the White House on November 5, with some traders expecting higher tariffs on China. The intense demand season in China, covering November to December, has also prevented a further drop in copper prices, with SHFE stocks decreasing and import premiums rising to a one-month high of $53 per ton. According to the broker, LME copper is supported around $9,000 per ton.