Due to concerns over a potential economic recession triggered by US President Trump's comprehensive tariff plan, base metals on the London Metal Exchange (LME) experienced a significant sell-off on Friday, with prices plummeting across the board. Copper futures recorded their largest single-day drop since the early stages of the COVID-19 pandemic in 2020.
At 17:00 London time on April 4 (00:00 Beijing time on April 5), LME three-month copper futures closed down $586.5, or 6.26%, at $8,780 per mt, after earlier hitting $8,720, the lowest level since March 2024.
Over the past 15 years, copper has only seen larger daily declines in March 2020 and during the European debt crisis in October 2011.
Copper futures fell by more than 10% this week.
Dan Smith, head of research at Amalgamated Metal Trading, said, "Metals reliant on economic growth are currently performing disastrously, as people fear tariffs will lead to a recession."
According to Securities Times, on April 2, 2025, the US government announced the imposition of "reciprocal tariffs" on Chinese goods exported to the US. The US approach violates international trade rules, severely undermines China's legitimate rights and interests, and is a typical unilateral bullying practice. In accordance with the Tariff Law of the People's Republic of China, the Customs Law of the People's Republic of China, the Foreign Trade Law of the People's Republic of China, and other relevant laws and regulations, as well as the basic principles of international law, and with the approval of the State Council, the Customs Tariff Commission of the State Council will impose additional tariffs on imported goods originating from the US starting from 12:01 on April 10, 2025. The relevant matters are as follows: 1. An additional 34% tariff will be imposed on all imported goods originating from the US, based on the current applicable tariff rates. 2. The current bonded and duty-free policies remain unchanged, and the additional tariffs imposed this time will not be exempted. 3. For goods that have already departed from the place of shipment before 12:01 on April 10, 2025, and are imported between 12:01 on April 10, 2025, and 24:00 on May 13, 2025, the additional tariffs specified in this announcement will not be imposed.
Announcement No. 18 of 2025 by the Ministry of Commerce and the General Administration of Customs announced the decision to implement export controls on certain medium-heavy rare earth-related items. A spokesperson for the Ministry of Commerce stated in response to media inquiries that, in accordance with the Export Control Law of the People's Republic of China and other relevant laws and regulations, the Ministry of Commerce, in conjunction with the General Administration of Customs, issued an announcement on April 4 regarding the implementation of export control measures on seven categories of medium-heavy rare earth-related items, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, which took effect immediately upon issuance.
To safeguard national security and interests and fulfill international obligations such as non-proliferation, the Ministry of Commerce issued an announcement in accordance with the Export Control Law of the People's Republic of China and the Regulations on the Export Control of Dual-Use Items of the People's Republic of China, deciding to include 16 US entities on the export control list and prohibiting the export of dual-use items to them.
Smith said, "Market confidence has been severely damaged, and this is not something you can quickly eliminate." JPMorgan now believes there is a 60% chance of a global economic recession by the end of the year, up from the previous 40%.
According to CCTV News, on April 4 local time, Fed Chairman Powell stated that the US Fed was shocked by the scope of tariffs imposed by US President Trump, indicating that the economic impact of the tariffs will be greater than previously thought.
Powell said that the extent of the tariff hikes will clearly far exceed expectations, and the economic impact may be the same, including rising inflation and slowing economic growth. The scale and duration of these effects remain uncertain. It is reported that Powell previously stated that the inflationary effects of tariffs are likely to be "temporary."
Powell declined to reveal whether he believes the US economy is heading toward a recession, but he acknowledged that the uncertainty of trade policy has put pressure on businesses, and an increasing number of forecasts indicate that the risk of a recession is rising.
Chinese financial markets were closed on Friday for the Qingming Festival holiday and will resume trading next week.
LME three-month aluminum futures, after hitting a low of $2,370 per mt since September 11, closed down $69.5, or 2.84%, at $378.5 per mt. Aluminum futures have fallen for 12 consecutive trading days, with a cumulative decline of 6.6% this week.
Three-month nickel futures fell by $974, or 6.19%, to $14,758 per mt, after hitting a low of $14,595, the lowest level since October 2020, with a weekly decline of nearly 10%.
Three-month zinc futures hit an eight-month low, falling 7% this week; lead futures touched their lowest level since October 2022, with a weekly decline of nearly 6%.
