Copper prices fell sharply to the lowest in two weeks on Monday, as concerns over US President Trump’s tariff policies begin to hit the industrial metal.
Three-month copper futures on the COMEX fell 1.8% as of 1 p.m. ET to $5.0375 per lb., or roughly $11,100 per tonne. In comparison, the benchmark three-month copper on the LME fell only 0.5% to $9,795 per tonne.
The large price gaps between the two markets have now shrunk by about $400 since its peak, reducing the potential profits to arbitrage traders.
“I think the fact that the arbitrage window has closed, or is closing, brings the risk that the COMEX contract could suddenly see significant further weakness,” Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen, said in a Reuters note.
“Traders have been buying copper to send to the United States ahead of expected tariffs on the metal, but as those tariffs are due to be imposed in the coming weeks, people are running out of time to make those trades,” Hansen said.
However, demand for the metal from top consumer China could provide decent support for copper prices, according to Hansen, noting a rise in the nation’s manufacturing activity, which expanded at its fastest pace in a year this month.
(With files from Reuters)
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