Copper in a slump

London Metal Exchange (LME) three-month copper slumped to a 17-month low of $8,105 per metric ton on April 7 after China responded to U.S. tariffs in kind.

Citi, which now expects copper to hit $8,000 per ton over the next three months, warns that commodity markets are still not pricing the full potential impact on demand.

Copper as a macro play cannot but reflect the broader market concerns about the negative impact of an escalating trade war between the United States and China on the world economy.

But at a micro level, the specific threat of U.S. tariffs on the metal is pulling normal trade patterns out of shape and causing both LME and Shanghai exchange inventories to fall.

Source – Reuters