Trump's tariffs ignite concerns of recession, copper market shifts from KTV party to ICU rescue.

Two weeks ago, copper prices soared as the market worried that US copper tariffs would squeeze global supply. But now, with the more widespread trade war initiated by US President Donald Trump disrupting demand prospects, copper is facing one of the most serious sell-offs in history. Copper, seen as a global economic barometer, plummeted by over 10% last week, collapsing along with the stock market as Trump's latest tariff measures turned out to be harsher than investors feared, sparking retaliatory measures from trading partners. Last Friday, copper prices on the London Metal Exchange (LME) fell by 6.3%, marking the largest drop since March 2020, dropping to $8,780 per ton. Copper futures on the New York Commodities Exchange (Comex) performed even worse. Trump's promise to impose import tariffs on copper had driven US copper prices to a historic high at the end of last month, making this sell-off shocking. Tariffs have led to one of the most serious sell-offs in the history of copper. US copper mining stocks also plunged last Friday, with Freeport-McMoRan (FCX.US) dropping by 13%, Ero Copper (ERO.US) and Hudbay Minerals (HBM.US) dropping by 12%, and Southern Copper Corporation (SCCO.US) dropping by nearly 10%. Market participants state that the sharp drop in copper prices has caused buyers to flee - with the steep fall in US prices, the high price offers for Comex deliverable goods dried up instantly. Traders and manufacturers had shipped significant amounts of metal to the US before the imposition of copper tariffs, which could lead to supply shortages and drive up prices for buyers in other parts of the world. Major metal traders Macquarie Energy Group and Trafigura Group had indicated last month that as copper flows to the US, prices could reach $12,000 per ton. However, with Trump's announcement last week of comprehensive import tariffs impacting demand in the US and elsewhere, the latest round of declines may worsen. Though the US only accounts for around 6% of global copper usage, the general slowdown in American imports of finished products could have swift and severe consequences for major industrial economies. Max Layton, global head of commodity research at Citigroup, stated: "We are certainly not recommending anyone trying to catch a falling knife. This is a monumental shift in global trade activity." J.P. Morgan now forecasts a recession in the US this year, while UBS Group AG suggests that for every one percentage point drop in US economic growth, output in open trade-oriented Asian economies like South Korea could fall by two percentage points. Regarding the copper market, Goldman Sachs Group, Inc. warns that escalating retaliatory tariffs could see copper prices temporarily drop below $9,000 per ton this quarter. Citigroup predicts that the average copper price outside the US this quarter will be $8,500, with significant downside risks at present. David Wilson, senior commodity strategist at BNP Paribas, stated: "Clearly, the market is considering the negative impact of US retaliatory tariffs on demand and the tariffs that major trading partners may respond with." He warned at the end of last month that once tariffs are introduced, copper prices could plummet. "We expect this downward trend to persist at least in the short term." However, producers believe that the long-term prospects for copper will be supported by the demand boost from energy transition and the data center boom in the US. "No one should panic. The fundamentals haven't changed," said Victor Gobitz, head of the startup Quilla Resources Inc. "Copper is essential for reducing fossil fuel consumption." In the long term, the challenges of finding new ore deposits and providing funding for development also support the prospects for copper. Evy Hambro, global head of thematic and sector investing at BlackRock, Inc., stated that the industry needs higher profit margins to prove that the investment required to increase supply is reasonable. Hambro said: "We need to see higher prices to encourage investment in new supply areas." On Monday, copper continued to plummet, with COMEX copper futures falling by more than 8%.