Copper Ends 10-Week Winning Streak as US Tariff Uncertainty Triggers Sharp Pullback

According to foreign media reports, copper recorded its first weekly decline since June as uncertainty over potential US tariffs on refined copper triggered a sharp reversal from record highs.

Three-month copper on the London Metal Exchange traded at around US$14,238/mt on Friday, leaving prices approximately 1.2% lower for the week and ending a 10-week winning streak. Copper had reached a record US$14,875/mt before falling 3.6% on Thursday, after Reuters reported that the White House had not yet made a decision on whether to impose tariffs on refined copper imports.

The pullback reflected a reduction in bullish positioning following the recent rally. However, underlying physical-market conditions remained relatively tight. Available LME copper inventories stood at 117,600 tonnes, while copper stocks monitored by the Shanghai Futures Exchange fell 13% week on week to 54,780 tonnes, their lowest level since January 2024.

Near-term tightness on the LME also eased. The cash-to-three-month spread shifted into contango on Thursday, with cash copper trading at a US$4.50/mt discount to the three-month contract, indicating reduced concern over immediate metal availability.

Uncertainty surrounding US trade policy remains an important driver of copper flows. Reuters reported that the White House has not yet made a decision on refined copper tariffs, as officials weigh concerns over higher manufacturing costs against the potential benefits of encouraging domestic mining. Expectations of possible tariffs had previously encouraged greater copper flows into the US, contributing to regional inventory imbalances.

Copper's retreat from record highs suggests that tariff expectations had become an important component of recent bullish positioning. While uncertainty over US trade policy could continue to generate short-term volatility, falling Chinese inventories and geographically concentrated stocks indicate that underlying physical supply conditions remain relatively tight. The shift of the LME spread into contango, however, suggests that immediate availability concerns have eased compared with earlier in the rally.