Copper and other base metals experienced a rally in early morning trading following the announcement of a 90-day tariff pause by President Trump, according to commodity analysts Warren Patterson and Ewa Manthey of ING.
This positive movement is further supported by expectations of economic stimulus measures. However, significant uncertainty remains due to the existing tariffs levied against China, a key consumer of metals, which have been increased to 125%.
A protracted trade war could negatively impact consumer confidence, diminish risk appetite, and ultimately reduce demand for raw materials.
Conversely, the potential for a prolonged trade dispute has also increased anticipation of more robust stimulus measures from Beijing. Such measures could potentially limit the downward pressure on copper and other industrial metals.
