According to CaiLian News, at 14:54 Beijing time yesterday, US media reported that Trump won the US presidential election. Prior to this, the fluctuating votes between Harris and Trump continuously disturbed the copper market. Copper prices experienced a jump initially and then pullback in the early trading session, and the sentiment in the copper cathode spot market was also sluggish in the morning, with spot discounts continuing to widen.
It is worth noting that at the beginning of the week, the market observed the retreat of the "Trump trade," the US dollar declined, and copper prices remained firm for two consecutive days, surpassing the 77,000 yuan/mt mark again on November 5, with SHFE copper jumping above all recent moving averages. In the past two days, the import window of SHFE copper front-month contract to the LME 3M contract opened and closed frequently, with significant intraday fluctuations.
However, as Trump continued to gain an advantage in the election, the "Harris trade" faded, and the "Trump trade" heated up again. The market, driven by risk aversion, preferred safe-haven assets, and Trump's election was favourable for the US dollar. The US dollar index surged above the 105 mark during the day, reaching a four-month high.
Copper, as a risk asset, was clearly under pressure and declined, but as of 3 PM on November 6, SHFE copper only retraced the gains from the past two days of the "Trump trade retreat," continuing to fluctuate in the 76,500-77,000 yuan/mt range. After the election results were announced, SHFE copper stopped falling, and LME copper also showed a rebound in continuous trading.
With the announcement that "US Republican presidential candidate Trump declared victory in the 2024 presidential election early on the morning of the 6th," market trading gradually calmed down. However, copper, as a risk asset, is inevitably affected by the rise of the US dollar.
Looking ahead, if Trump's election continues to be favourable for the US dollar and US bonds, copper will face some pressure on the macro front. However, considering the continued tightness in copper raw materials in 2025 and the expected improvement in global copper demand, copper prices will continue to receive bottom support. Additionally, after the US election, domestic macro favourable policies may be further released, which is expected to provide further support for relatively firm copper prices.
