Copper prices surged to multi-month highs on Wednesday due to potential U.S. tariffs and improving demand from China. The three-month copper price on the LME reached $9,769 per ton, influenced by a decline in overseas inventory levels. Recent geopolitical developments and positive economic indicators further bolstered investor sentiment, resulting in price increases across various metals.

On Wednesday, copper prices reached multi-month highs due to expectations of new U.S. tariffs and improved demand from China. The three-month copper price on the London Metal Exchange (LME) increased by 1.1% to $9,769 per ton, marking its highest level since November 5. Concurrently, U.S. Comex copper futures rose by 1.9% to $4.86 per pound, the highest since May 29, the previous year.

New U.S. tariffs of 25% on steel and aluminum became effective on Wednesday, and President Donald Trump has initiated a probe into potential copper tariffs, prompting U.S. traders to bolster their stocks. Ole Hansen, head of commodity strategy at Saxo Bank, noted that overseas inventory levels are decreasing due to significant copper shipments to the U.S., which is supporting prices elsewhere.

Investor sentiment saw a boost following agreements on a ceasefire proposal in Ukraine and a positive shift in U.S.-Canada relations. European stock markets rallied after Ukraine’s acceptance of a U.S. ceasefire proposal, with Trump retracting his previous stance on escalating metal tariffs after a move from Ontario, Canada to halt surcharges on electricity exports to the U.S.

In China, copper futures on the Shanghai Futures Exchange closed 2.08% higher, bolstered by forecasts for recovering demand. Analysts at ANZ indicated a positive growth trend in underlying fundamentals, particularly within grid infrastructure and electric vehicle sectors, supported by recent economic stimulus measures.

Zinc emerged as the leading performer on the LME, gaining 1.5% to $2,956 per ton following Nyrstar’s announcement of a 25% production cut at its Hobart zinc operations. Other metals also experienced gains, with LME aluminium rising by 0.6%, nickel increasing by 1.4%, lead climbing by 1%, and tin advancing by 0.9%.

In summary, copper prices have surged to multi-month highs amid expectations of new U.S. tariffs and improving demand from China. The recent developments, including the U.S. ceasefire proposal and positive economic indicators from China, have significantly enhanced investor sentiment. Additionally, other metals have also shown favorable movements, indicating a potentially strong market atmosphere for metallurgical products in the immediate future.

Original Source: www.tradingview.com

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