ING's Commodities Strategists Warren Patterson and Ewa Manthey report that Copper prices fell back below $14,000/t after a recent rally, as rising US–Iran tensions and macro concerns weighed on demand expectations. They note that profit-taking and uncertainty over US tariff policy on metals, including a review of refined Copper imports, are driving near-term volatility despite broadly supportive structural fundamentals linked to electrification and grid investment.

Tariffs and macro risks weigh

"Copper retreated on Wednesday, pulling back from a three-week high, as rising US-Iran tensions shifted focus to demand risks. LME copper fell back below $14,000/t after gaining around 3% over the previous two sessions."

"Despite ongoing supply risks, concerns over weaker global growth, higher energy costs and inflation weighed on sentiment. The move also reflects profit-taking after the recent rally, driven by expectations of tighter supply ahead of potential US import tariffs."

"Separately, the US adjusted its metals tariff framework. It maintained elevated tariffs on certain copper products while tightening coverage across downstream goods. At the same time, rules of origin were eased. The threshold for qualifying as a US-origin metal lowered from 95% to 85%, making it easier for importers to access preferential treatment. The scope of tariffs was also broadened to include additional semi-fabricated products such as electrical conductors and cables, extending protection further into manufacturing supply chains."

"Market attention is now shifting to the ongoing review of refined copper imports. Any additional duties could have a more material impact on US supply dynamics, given the strong reliance on imported refined metal."

"Market fundamentals remain broadly supportive, with tariff-driven trade distortions and structural demand linked to electrification and grid investment. However, the near-term price direction is likely to remain sensitive to macro risks, with uncertainty in the Middle East acting as a headwind."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)