Copper Market Shakes with Uncertainty as Trump Stops Price Spike

• The increase in copper prices is supported by the expected lack of sufficient supply of the metal.
• The sharp rise in prices is being held back by doubts about Donald Trump's tariff policy.
• Copper is one of the key raw materials in the economy.

Copper prices are at a one-month high. The rusty metal is becoming more expensive due to supply concerns. A pound of the metal costs about $4.80 in the U.S. That's 40 cents less per pound than in March, when Washington was dealing blows in a tariff war left and right and prices were breaking records.

However, according to analysts, prices are high and there are many indications that they may rise further.

Confusion over large copper mine in Africa

It depends mostly on the development of the situation at the Kamoa-Kakula mine . This plant located in the Democratic Republic of Congo has partially suspended production. All because of the earthquake and the risk of destruction of the workings. Since Kamoa-Kakula is the fourth largest copper mine in the world, there are serious concerns about the supply of copper.

In April, the mine produced a record 50,000 tons. However, the mine's main shareholders, including operator Ivanhoe Mines, can now forget about this result. Currently, there are opinions that the plant will not be able to return to normal production levels until next year. Geotechnicians are wondering what caused the tremors and what the future development of the situation will be.

The shocks also spilled over into Ivanhoe shares. After the company announced on Monday, May 26, that it was withdrawing its operating forecasts, Ivanhoe Mines shares fell 16 percent on the Toronto Stock Exchange, to C$10.79 (about $7.86).

The problem is that even a loss of some production from the Congolese mine could be a significant problem for copper consumers. The copper market is currently quite balanced. A shortage of several hundred thousand tons of the metal could cause a copper shortage, which is a direct path to higher prices.

For now, Donald Trump is stopping the price increase

And this, according to analysts, would have happened quickly if not for Donald Trump. A few days ago, he threatened 50% tariffs on products from European Union countries. Although he withheld their implementation after a phone call from Ursula von der Leyen, the head of the European Commission , the situation is uncertain.

Any tariffs will cause an economic slowdown. And that will mean lower demand for copper. It should be remembered that the tariffs will also hit the US. It is hard to imagine that the EU will not retaliate against Washington with the same move.