London Copper Prices Plunge Amid Escalating U.S.-China Trade Tensions

The London Metal Exchange (LME) copper price, a bellwether for global industrial health, has become a casualty of the intensifying U.S.-China trade war in April 2025. After surging to $9,206.5 per metric ton in early April on hopes for tariff exemptions and Chinese stimulus, prices plummeted 7.7% by mid-April to $8,735 per ton as fears of prolonged economic damage from trade hostilities took hold. By month’s end, the metal stabilized near $9,163 per ton, reflecting a market caught between short-term pain and long-term optimism tied to decarbonization.

The Volatile April: Copper Prices Swing on Trade Developments

The April rollercoaster began when the U.S. announced limited tariff exemptions for electronics and automotive parts, easing immediate supply-chain pressures and lifting copper prices. Investors bet that China’s pledge to boost infrastructure spending and green energy projects would underpin demand. But hopes faded as the U.S. expanded its list of targeted Chinese imports to include copper and semiconductors, prompting Beijing to retaliate with a 34% tariff on all U.S. goods starting April 10.

The resulting disruption reverberated globally. U.S. manufacturers faced higher input costs, while Chinese exporters rushed to ship copper to the U.S. before tariffs took effect, flooding warehouses in Rotterdam and Singapore. would reveal a stark regional divergence: LME stocks surged as buyers sought pre-tariff bargains, while Chinese inventories fell as domestic demand stalled.

Supply Chain Disruptions and Market Uncertainty

The tariff war created a logistical nightmare. With U.S. buyers avoiding Chinese imports, global copper flows rerouted, widening regional price spreads. By mid-April, the Shanghai Futures Exchange (SHFE) price traded at a $120-per-ton discount to LME prices, a gap analysts attribute to diverging supply dynamics and liquidity imbalances. Meanwhile, the LME grappled with canceled warrants—a measure of physical metal withdrawals—rising to 35% of total inventories, signaling tightness in deliverable stocks.

Chile, the world’s largest copper producer, compounded worries by slashing its 2025 price forecast to $7,500 per ton, citing weaker global demand. Analysts at Goldman Sachs warned that a global recession could push prices as low as $6,600—a level not seen since 2020’s pandemic crash.

Long-Term Demand vs. Near-Term Headwinds

Despite the gloom, copper’s fundamental appeal remains intact. Renewable energy and electric vehicles (EVs) require four to six times more copper than traditional energy systems. show these sectors could add 15 million metric tons annually by 2030, equivalent to China’s current annual consumption.

Yet near-term risks loom large. U.S. manufacturers, already struggling with higher energy costs, now face a 25% tariff on Chinese copper, raising production expenses by an estimated 3-5%. Meanwhile, China’s stimulus measures—expected to focus on green infrastructure—have been slow to materialize, leaving factories in Jiangsu and Guangdong provinces idling.

Outlook: Uncertainty Persists

Investors now await two critical inflection points: the fate of U.S. auto-sector tariff exemptions, which could ease pressure on carmakers reliant on Chinese copper, and the effectiveness of China’s fiscal stimulus. Citigroup analysts suggest prices might rebound to $9,500 by year-end if exemptions expand and Beijing accelerates spending. However, with canceled warrant ratios on the LME still elevated and regional price spreads widening, liquidity risks linger.

The copper market’s April turmoil underscores a broader truth: while decarbonization promises a bright future for industrial metals, trade policy and macroeconomic headwinds remain potent near-term drags. For investors, the metal’s trajectory hinges on whether policymakers can stabilize trade relations or if the world is set for a deeper, tariff-driven slowdown.

In the end, copper’s price—now hovering around $9,163—serves as both a barometer of trade tensions and a canary in the coal mine for global growth. As one commodities trader put it: “We’re pricing in the next shoe to drop, but the long-term story is still there. It’s just a question of who blinks first on trade.”