ASX copper stocks caught in Trump tariff turmoil as major broker turns bearish

Things move quickly in markets, and they move even faster in a Trump 2.0 universe! Just last week, I wrote an article on the copper market, including major broker views and technical analysis of the copper price.

The general view was one of modest upside in the copper price over the next few months as traders attempted to source all the copper they could find and send it to US warehouses ahead of a looming import tariff expected in the final quarter of the year.

The technical outlook, which I will update for you below, appeared to confirm both the prevailing strength in the copper price and, similarly, the modest upside. But themes that may have taken months to play out in boring-old pre-Trump 2.0 markets (aaahhh remember those!? 🤔) seem to play out much faster now.

Growing media speculation, and the tone of President Trump's speech yesterday, are firming the probability that a US import tariff on copper will be implemented in weeks, not months. This has sparked a little burst of chaos in the copper market, as well as a previously unwelcome reversal for the share prices of ASX-listed copper stocks.

Let’s investigate a very turbulent week in copper, the technical outlook, as well as Citi’s latest copper price forecasts (Hint: they’ve turned bearish!).

What a week for copper!

In my previous article, I explored major broker Citi’s perspective on copper, highlighting its anticipation of a tightening global market driven by supply constraints and robust demand. But the key driver of Citi’s assumptions – as is the case for most of the research community – is a potential 25% Section 232 tariff on US copper imports.

Initially pencilled in for Q4 2025, the looming tariff was causing many copper traders to frontload their shipments into the US, therefore tightening demand elsewhere and triggering the surge in the copper price since February (see chart below – and note that I picked that surge! 💪).

However, that Bloomberg article, as well as growing rhetoric on a stronger and not weaker tariff stance from President Trump in comments this week, has caused Citi and others to revise their outlooks – and that’s triggered both a spike and blowoff in the copper price over the last few days.

Citi turns bearish

The prospect of an earlier-than-expected 25% tariff in Q2 2025 has upended prior assumptions about physical market dynamics, particularly the window for arbitrage and export flows. Traders suddenly believed they needed to get their work done sooner rather than later – so we saw a sharp spike in the COMEX copper price on Tuesday afternoon and into Wednesday.

The risk now, says Citi, is that with the timeline having been compressed, the opportunity for copper arbitrage has faded. This is being reflected by narrowing discounts in near-dated arbitrage spreads (e.g., May/July contracts) compared to later months.

The broker now expects the 25% U.S. copper import tariff to take effect sometime in the next three months, closing the door on further significant frontloading of US-bound copper shipments. This adjustment has led Citi to turn “near-term bearish” on ex-US copper pricing, revising their 0-3 month price target from US$10,000/t to US$9,500/t.

It gets worse. The broker suggests “a broader unwind of physical demand” and “growth headwinds” for the US economy resulting from President Trump’s broader US import tariff strategy, would cause a further easing in the copper price – to average US$8,800/t through the second half 2025.

To put this into perspective, the price of copper was trading at US$9,982/t on the London Metals Exchange (LME) prior to this week’s abrupt shift in market sentiment (Tuesday), and it closed at US$9,787 yesterday. If Citi’s new forecasts are correct, then there could be as much as 10% downside in the LME copper price by the end of this year.

Copper chart technicals confirm short-term blow-off potential

I track the COMEX copper price very closely in the ChartWatch section of Market Index’s Evening Wrap. I turned bullish on 6 February this year, and have more for most of the time since then been working off a final potential target of 5.3805-5.3935.

As can be seen in the chart below, that target was achieved as the market responded to the media speculation that the US import tariff on copper would be implemented sooner rather than later. The 26 March candle, with its long upward pointing shadow topped at 5.374, reversing intrasession to close at 5.243.

This article first appeared on Market Index on Friday 28 March 2025.