US ELECTIONS: Trump win, tariff plans weigh on copper prices

Donald Trump's win of the US presidential election hammered the price of copper on the prospect of steep tariffs, a possible pullback on energy transition policies and a surging US dollar, analysts said Nov. 6.

The COMEX spot copper price slumped by more than 4% to under $4.30 per pound during early morning trading on Nov. 6 as the market reacted to what a second Trump administration could mean for metals markets.

"The risk of China tariffs and attempts to kill the [Inflation Reduction Act are] likely to weigh on prices, especially copper," Ole Hansen, head of commodity strategy at Saxo Bank, told S&P Global Commodity Insights.

Trump, who launched targeted aluminum and steel tariffs during his previous administration, flagged a desire for much broader tariffs throughout his campaign against Vice President Kamala Harris. Trump has suggested a 10% to 20% tariff on foreign goods, a 60% tariff on Chinese products and a reciprocal tariff strategy for trading partners.

Analysts expect the tariffs to check global growth and erode metal demand, which would be bearish for industrial metal prices.

"We see tariffs as a headwind to demand projections across many industrial metals over [the first half of] 2025," Colin Hamilton, a commodities analyst at BMO Capital Markets, said in a Nov. 6 report. Hamilton added the tariffs could curb growth and delay metals-intensive net-zero goals "given the lack of viable alternatives to China's technological lead in energy transition technology."

The market may have already priced in Trump's China-targeted tariff plans, but not a broader multilateral trade war, Hamilton said.

Analysts also noted that a stronger dollar was driving down prices for base metals and gold. Hopes for deregulation, tax cuts and government borrowing under Trump was stirring market optimism, while "a looming global tariff war is taking the US dollar up to a one-year high," David Rosenberg, founder and president of Rosenberg Research & Associates Inc., said in a Nov. 6 note.

Still, in the near term, Hansen said he expects copper prices to rebound after the sharp move on Nov. 6, given that any new tariffs may take many months to come.

"But, overall, the global economy will hold its breath," Hansen said.