Commerzbank’s Barbara Lambrecht notes that the LMEX index remains under pressure even as China’s manufacturing PMI edges above 50, supporting Copper via AI-driven exports. She highlights a US study deadline on potential refined Copper tariffs that could spur pre-emptive US demand and further COMEX stock builds. A Trump decision to forgo tariffs or postpone them would ease some market strain.

Tariff scenarios and Chinese demand

"The London Metal Exchange (LMEX) index is struggling to gain ground. It fell again yesterday, but this morning China’s official Purchasing Managers’ Index is showing signs of recovery: the manufacturing PMI climbed to 50.3 in June, delivering a positive surprise. The key factor was likely the export-driven industrial activities, which are being boosted by the rapidly growing segment of artificial intelligence worldwide."

"Today is the deadline for US Secretary of Commerce Lutnick’s report on the possible introduction of a 15% tariff on refined copper. If such a tariff were recommended and US President Trump were to announce its introduction from 1 January 2027, this would likely trigger another surge in demand in the US in the second half of the year, particularly as the tariff rate could then rise to 30% in 2028."

"If Trump rules out tariffs – perhaps because companies that require large amounts of copper point to the scarcity of US supply, as they did last year – material could be drawn from COMEX stocks, providing some initial relief. Last but not least, however, the decision could also be postponed once again, which would probably have little impact on the market."

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