Copper prices have recently declined amid potential US tariff measures

Copper prices recently witnessed a declining trend as traders wary about potential U.S. tariff measures and shifting inventory trends in China.

Market sentiment weakened due to the prospect of new trade restrictions, which could impact global supply chains. Analysts noted that similar policies in the past had led to bearish trends in base metals.

On the London Metal Exchange (LME), benchmark copper slipped by around 0.5% to $9,507 per metric ton by 1236 GMT, following an earlier 8% gain this month driven by expectations of stronger Chinese demand post-Lunar New Year.

Meanwhile, copper inventories in Shanghai Futures Exchange (ShFE) warehouses have climbed beyond 260,000 tons, a sharp increase from around 83,000 tons at the beginning of the year. Stocks in bonded warehouses in Shanghai have also more than doubled to 33,000 tons since mid-January.

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According to the International Copper Study Group (ICSG), the market recorded a surplus of 301,000 tons last year, reversing a deficit of 52,000 tons in the previous year. Additionally, copper stocks in LME-approved warehouses have risen by 12% to 267,225 tons since mid-February. However, cancellations—indicating planned deliveries—stand at 84,400 tons, suggesting a significant outflow of copper from LME storage in the coming weeks.

Much of this copper is expected to move to COMEX warehouses in the U.S., where prices have strengthened due to concerns over potential import restrictions.