Copper prices tumbled to their lowest close in nearly three months, settling -1.3% at $2.992/lb. to cap a ~10% drop from a peak earlier this month.
There is “concern globally about what trade wars mean for metals,” says Nitesh Shah, director of research at WisdomTree. “Over the last couple of weeks or so, people have been thinking of the impact as a very negative thing for industrial metals.”
Traders are betting that the likelihood of a negotiated solution that avoids tariffs has become more distant, potentially hurting global growth and damping demand for industrial metals such as copper: China consumes ~50% of the world’s copper.
Copper traders also are watching labor negotiations at two copper mines controlled by Chile's Codelco - including the Chuquicamata mine, home to one of the world’s largest copper deposits - that potentially could reduce supply.