logo
Copper market navigates tariff uncertainty amid tight global supply - Middle East Business News and Information

Copper market navigates tariff uncertainty amid tight global supply - Middle East Business News and Information

Mid East Info09-05-2025

Ole Hansen, Head of Commodity Strategy, Saxo Bank
The copper market continues to trade within a wide range, with some of the price action being driven by market participants trying to preempt what tariff level, if any, the US Commerce Department eventually will recommend the Trump administration apply on US imports. Just like steel and aluminium, Trump has threatened to impose a 25% duty on all copper imports—a move that could roil the global market for one of the world's most important metals—not least considering a robust demand outlook, recently further enhanced by an energy transition which is expected to increase demand for a key conductor of power towards EVs, AI-related data centres, and cooling as parts of the world continue to get warmer.
The tariffs, designed to protect local producers and foster increased US production and refining capacity, would, however, leave US manufacturers paying much more for their metal than rivals overseas. The probe launched in February under Section 232 of the Trade Expansion Act is now expected to be ready within weeks, well ahead of the 270-day deadline, and the eventual announcement is very likely to trigger a major price adjustment in the market—not least in the spread between London and New York copper—which reflects the market's attempt to guess the eventual tariff level. Following a slump in early April to 6%, the spread has been hovering around 15% before declining to a current level around 8.5%.
The spread is currently coming down amid strong demand in China, reflected by an ongoing slump in stockpiles monitored by the Shanghai Futures Exchange and the highest premium for imported copper since December 2023. Overall, an ongoing decline in copper stocks monitored by the futures exchanges in London and Shanghai has only been partly offset by a rise in New York, albeit stockpiles there has risen to a six-year high driven by hoarding ahead of the mentioned tariff announcement. China has seen the biggest reduction during the past ten weeks, with SHFE-monitored stockpiles down 67% to just 89 kt.
The market worries that the current flow of copper heading towards the US ahead of the tariff announcement will be left stranded there until consumed, thereby exacerbating an already tight global market into the second half of 2025. By Q3 2025, Goldman Sachs estimates 45-60% of global reported copper inventories could be in the US, which accounts for just 6% of global refined demand—leaving the rest of the world with very low stocks of this important transition metal.
This tightness, albeit a function of trade dislocation, may in the coming months discourage new short positions driven by trade war-related growth worries from entering the market, thereby limiting the downside to the copper price through 2025.
The high-grade copper future has settled into a wide range, with USD 4 per pound having proved to offer support on numerous occasions, while the latest upside spike was mostly related to the tariff probe briefly driving the HG premium over London above 16%. In the short term, the London Metal Exchange (LME) contract offers a better insight into the global supply and demand outlook, which, according to Zijin Mining Investment Shanghai, a unit of China's top copper miner, is currently being underpinned by the mentioned strength in China, where apparent demand growth is running near double-digit levels this year, driven by strong orders from State Grid Corp, the world's single largest buyer of copper, and rising production of copper-intensive goods such as air-conditioning units to electric vehicles.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

COT Report: Metals, energy demand offset by broad Ag selling
COT Report: Metals, energy demand offset by broad Ag selling

Mid East Info

time2 hours ago

  • Mid East Info

COT Report: Metals, energy demand offset by broad Ag selling

Ole Hansen, Head of Commodity Strategy, Saxo Bank In the latest reporting week to 3 June, the period saw the USD trade broadly weaker. Speculators nevertheless responded by reducing their overall short USD position versus the eight IMM FX futures contracts by 8%, to USD 12.2 billion. At the individual currency level, buying of EUR and MXN was more than offset by selling of JPY and CAD. Strong metals and energy demand offset by agriculture selling The reporting week to 3 June showed a major divergence in hedge funds' appetite for exposure—strong demand for energy and metals, both precious and industrial, was partly offset by broad net selling across the agriculture sector. Overall, the Bloomberg Commodity Index rose 0.4% during the week, with strong gains across both metals sectors being offset by a 3.4% loss in the agriculture sector, where all components except coffee suffered setbacks. At the individual commodity level, hedge funds concentrated their demand in WTI crude oil, gas oil, natural gas, gold, and silver. Meanwhile, the broad selling in agriculture was led by soybeans, corn, and sugar. Silver—which had yet to break the USD 35 resistance level as of last Tuesday—saw its net long rise by 36% to 45.4k contracts, just 4.3k contracts below the five-year high set in March. In contrast, fresh short selling reduced the platinum net long by 31% to 12.8k contracts, just before prices embarked on a fresh surge that resulted in a 12% rise since last Tuesday.

US President: Iran has become more aggressive in nuclear talks
US President: Iran has become more aggressive in nuclear talks

See - Sada Elbalad

time4 hours ago

  • See - Sada Elbalad

US President: Iran has become more aggressive in nuclear talks

Basant Ahmed US President Donald Trump said on Tuesday that Iran has become more aggressive in the nuclear talks. Trump added in his remarks today that "it's surprising and disappointing to me. But we'll meet again, and we'll see what happens." He noted that the two sides remain at odds over whether the country will be allowed to continue enriching uranium on Iranian soil. Trump said the next round of talks between the United States and Iran will take place next Thursday, while a senior Iranian official and a US official said it is unlikely to take place that day. read more Gold prices rise, 21 Karat at EGP 3685 NATO's Role in Israeli-Palestinian Conflict US Expresses 'Strong Opposition' to New Turkish Military Operation in Syria Shoukry Meets Director-General of FAO Lavrov: confrontation bet. nuclear powers must be avoided News Iran Summons French Ambassador over Foreign Minister Remarks News Aboul Gheit Condemns Israeli Escalation in West Bank News Greek PM: Athens Plays Key Role in Improving Energy Security in Region News One Person Injured in Explosion at Ukrainian Embassy in Madrid News China Launches Largest Ever Aircraft Carrier Sports Former Al Zamalek Player Ibrahim Shika Passes away after Long Battle with Cancer Lifestyle Get to Know 2025 Eid Al Adha Prayer Times in Egypt News Prime Minister Moustafa Madbouly Inaugurates Two Indian Companies Business Fear & Greed Index Plummets to Lowest Level Ever Recorded amid Global Trade War Arts & Culture Zahi Hawass: Claims of Columns Beneath the Pyramid of Khafre Are Lies News Flights suspended at Port Sudan Airport after Drone Attacks News Shell Unveils Cost-Cutting, LNG Growth Plan Videos & Features Video: Trending Lifestyle TikToker Valeria Márquez Shot Dead during Live Stream Technology 50-Year Soviet Spacecraft 'Kosmos 482' Crashes into Indian Ocean

Between Agreement and War: Israel's Strategic Dilemma over a Possible US-Iran Nuclear Deal
Between Agreement and War: Israel's Strategic Dilemma over a Possible US-Iran Nuclear Deal

Daily News Egypt

time6 hours ago

  • Daily News Egypt

Between Agreement and War: Israel's Strategic Dilemma over a Possible US-Iran Nuclear Deal

Israel harbours deeper concerns over US President Donald Trump's potential nuclear deal with Iran than it ever did regarding the agreement negotiated under Barack Obama. According to Tel Aviv, the imminent accord would leave Iran merely months away from acquiring a nuclear weapon while severely limiting Israel's ability to deliver a decisive military strike against Tehran's nuclear infrastructure. In this scenario, Iran would preserve its controversial program, and Israel would lose what it perceives as a historic opportunity to dismantle Tehran's nuclear ambitions. Over a month ago, Trump unexpectedly announced the beginning of direct negotiations with Tehran, aiming to curtail Iran's nuclear program in exchange for the easing of economic sanctions. His declaration came in the presence of Israeli Prime Minister Benjamin Netanyahu, who had traveled to Washington seeking American approval for pre-emptive strikes on Iranian nuclear facilities. Over the past two years, Israel has weakened Iran's regional influence through sustained military operations against its allies—Hamas in Gaza, Hezbollah in Lebanon—and by the removal of its key ally, former Syrian President Bashar al-Assad. At the same time, severe Western sanctions have crippled Iran's oil-dependent economy. Upon finalizing the deal, Trump is expected to assert that he has extracted greater concessions from Iran than his predecessors, Obama and Joe Biden. His claim would hinge on two major factors: the inclusion of US nuclear inspectors alongside IAEA monitors in Iran's nuclear sites and a complete halt to uranium enrichment—even at low levels—for a symbolic period that may last a year. However, Israeli officials remain deeply concerned, viewing this agreement as even riskier than the Joint Comprehensive Plan of Action (JCPOA) of 2015, which they largely dismissed as flawed. Dr. Hatem Sadek President Biden's most significant diplomatic achievement was persuading Tehran to freeze its 60% uranium enrichment—a feat achieved in 2023 through a US agreement releasing $6 billion of Iran's frozen assets. Obama, on the other hand, succeeded in reducing Iran's medium-enriched uranium stockpile to 3.67% but failed to halt enrichment entirely or secure Tehran's consent for American inspectors to participate in monitoring. There are several additional concessions Trump may secure that neither Biden nor Obama could—such as guarantees against attacks on US forces or a temporary moratorium on Iran's ballistic missile tests, which have both conventional and nuclear applications. If accomplished, why does this alarm Israeli officials? Israeli intelligence leaders, including the Mossad Director and the head of military intelligence, have spent substantial diplomatic capital lobbying the Trump administration and its envoy, Steve Witkoff, in numerous meetings across the Middle East, Europe, and the US Their objective was to push negotiations toward two extreme outcomes: Tehran's submission or a decisive military strike. However, these efforts clashed with Trump's transactional style, which prioritizes immediate gains over long-term strategy. While Israeli officials believe they made some progress, fears persist that Trump's main goal is securing a deal—regardless of whether it aligns with Israel's stringent security concerns. Additionally, if Trump pressures Israel to abandon military action, it might not only prevent overt strikes but also hinder covert operations, such as Mossad-led sabotage missions that have delayed Iran's nuclear weapons program in recent years. In 2015, Iran relied on about 20,000 aging IR-1 centrifuges, requiring roughly a year to produce enough weapons-grade uranium for a bomb. By 2025, however, Iran possesses thousands of advanced IR-4 and IR-6 centrifuges, a fraction of which could be concealed in undisclosed facilities much smaller than the known sites at Natanz and Fordow. This would allow Tehran to achieve weapons-grade uranium within months. Reports indicate Iran's current enrichment levels reach 60%—a threshold demonstrating mastery of nuclear science, making bomb acquisition more a matter of timing than technical capability. From Israel's perspective, any agreement at this stage would consolidate Iran's nuclear potential while lifting international sanctions, enabling Tehran to accelerate its program. By contrast, Israeli leadership sees the current moment as an unparalleled strategic opportunity: with Hamas and Hezbollah weakened, no time is more suitable for a pre-emptive strike. In conclusion, whatever restrictions and safeguards Trump's team negotiates, at best they would leave Iran just months from a nuclear breakout while denying Israel its clearest chance in decades to strike. Tehran may be open to a deal but remains wary of Trump's unpredictable leadership and sceptical of any non-binding agreement that a future US administration might discard. The most it would likely accept is a temporary enrichment suspension in exchange for the release of frozen funds and recognition of its right to civilian nuclear energy—an outcome Israel would see as disastrous. Meanwhile, Gulf states and regional actors, while wary of Iran's ambitions, increasingly prefer uneasy coexistence over a catastrophic war that could disrupt economies and stall development plans. The negotiation landscape remains murky and fraught with uncertainty for all involved. Dr. Hatem Sadek – Professor at Helwan University The post Opinion | Between Agreement and War: Israel's Strategic Dilemma over a Possible US-Iran Nuclear Deal appeared first on Dailynewsegypt.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store