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Copper prices fell to a three-week low below $14,000 per metric ton, declining 1.6% to $14,005.50, as London Metal Exchange (LME) inventories rose 9,600 tons and the U.S. dollar strengthened. The metal’s price dropped 6.2% from its previous week’s record high of $15,000, reflecting easing supply tightness and heightened uncertainty over U.S. tariffs and monetary policy.

Copper prices fell to a three-week low below $14,000 per metric ton on Monday, declining 1.6% to $14,005.50, as rising LME inventories eased supply concerns and a stronger dollar pressured industrial metals. The decline followed a selloff triggered by uncertainty over U.S. tariffs on refined copper imports and the Federal Reserve’s upcoming policy meeting. LME copper inventories rose 9,600 tons, including 4,550 tons delivered to Italian warehouses, signaling a shift from supply-driven price support to macroeconomic factors.

The cash LME copper contract’s discount to the three-month forward contract widened to $39.25 a ton from about $10 on Friday, indicating easing immediate supply constraints. However, the dollar’s strength and U.S. trade policy uncertainty amplified pressure on copper, which had fallen 6.2% from its record high of $15,000. Neil Welsh of Britannia Global Markets noted that tighter U.S. monetary policy was weighing on risk appetite, further dampening investor confidence.

The broader industrial metals sector also declined, with aluminum down 0.3% to $3,242 a ton and zinc dropping 2.1% to $3,798, both touching three-week lows. Lead fell 0.6% to $1,880.50, its lowest since August 3, while nickel and tin also declined, underscoring a sector-wide caution. Analysts highlighted that the market is shifting from a supply-driven rally to one influenced by inventory levels, monetary policy, and trade tensions, which could prolong volatility.

Copper producers, miners, and industrial users face reduced revenues and demand uncertainty, particularly as U.S. import tariffs remain unresolved. The Federal Reserve’s policy meeting, scheduled for Tuesday-Wednesday, could further impact commodity prices by influencing borrowing costs and economic activity. Meanwhile, COMEX copper stocks fell slightly to 696,268 metric tons, ending a 58-day streak of daily increases, signaling a potential overhang in U.S. markets.

The Federal Reserve’s upcoming policy meeting on Tuesday-Wednesday is expected to influence copper and other commodities, as higher interest rates could dampen demand. Continued shifts in U.S. trade policy and monetary conditions will shape price trends in the coming weeks.

Copper’s three-week low reflects a transition from supply tightness to macroeconomic pressures, with U.S. tariffs and Fed policy as key risks. The broader industrial metals decline underscores heightened market caution amid shifting risk appetite.

Topics: Commodities, Metals, U.S. Markets, Currency, Trade Policy, Federal Reserve, Industrial Demand, LME, Copper, Market Volatility

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Source: ET Markets