Copper Retreats from Five-Month High Amid Weak Chinese Data and U.S. Tariff Concerns

Copper Prices Decline After Hitting Multi-Month High

Benchmark three-month copper on the London Metal Exchange (LME) settled at $9,786 per metric ton, retreating from an intraday peak of $9,850, the highest level since October 9. The drop came after China, the world’s largest consumer of industrial metals, reported a sharp decline in new bank lending for February.

Weak Lending Data Raises Concerns Over Chinese Economy

China’s banking sector saw a larger-than-expected decline in new loans last month, reversing the record-high lending activity in January. The data has cast doubts on Beijing’s ability to maintain economic momentum through stimulus measures.

Nitesh Shah, a strategist at WisdomTree, noted that the figures do little to reassure investors about China’s economic stability.

"It doesn't really give confidence that China has got things under control in terms of stimulus and activity in the country, so that's going to be negative for the copper price," Shah said.

China plays a crucial role in global copper demand, and any signs of slowing economic activity tend to impact prices significantly.

U.S. Tariffs Add to Market Volatility

In addition to concerns over Chinese demand, copper prices remain volatile due to uncertainty surrounding U.S. trade policies. The possibility of new tariffs on imported metals has led to cautious trading, as investors weigh the potential impact on industrial costs and supply chains.

If tariffs are implemented, they could increase costs for U.S. consumers, which may further influence market sentiment. The ongoing trade uncertainty has contributed to fluctuating copper prices in recent weeks.

Outlook for Copper Prices

Analysts expect copper prices to remain volatile in the near term, with market direction largely dependent on:

• China’s economic data and stimulus measures
• Global industrial activity and demand trends
• Potential changes in U.S. trade policies

Investors will closely watch China’s upcoming economic indicators and any policy shifts in U.S. trade regulations to determine the future trajectory of copper prices.