Copper Falls Further

Copper prices continue to slide as we move through the middle of the week. Fresh fears over incoming Trump tariffs have hit sentiment recently with copper futures down almost 6% from last week’s highs. This week, Trump cited plans to impose tariffs on imported copper as a means of boosting domestic production. The news comes amidst weaker copper sentiment following softer-than-forecast Chinese manufacturing figures at the start of the week. The Chinese manufacturing PMI was seen falling back into negative territory last month at 49.1, down from 50.1 prior and expected. With China also facing the prospect of tariff action from Trump, the outlook for copper demand has weakened materially, weighing on prices this week.

Fed On Watch

Looking ahead, traders will be keeping a close eye on US Dollar movements around the FOMC tonight. With the Fed widely expected to keep rates on hold, the focus will be on the bank’s outlook and guidance on rates. If the Fed leans to the dovish side, bolstering rate cut expectations for March and May, this should weaken USD and help boost copper prices near-term. However, if we hear a more neutral, or even hawkish message from the Fed, this will likely see copper prices fall as the Dollar pushes higher into the end of the week.

Technical Views

Copper

The sell off in copper has seen the market breaking below the 4.30 level with price now fast approaching a test of the triangle lows. If we break lower here, 4.0395 will be the next support to watch ahead of the bigger level at 3.9350.