Copper Plunges 5.3% as Tariff Rumors Fade
Copper prices dropped 5.3% to $6.52 per pound after reports indicated the US administration has paused its refined copper tariff plan. Mining equities suffered a sharp sell-off, reversing gains from a record-breaking month.
Comex copper for December delivery fell as much as 5.4% to $6.5160 a pound. The metal had settled at a record $6.8885 the previous day. Traders priced out the tariff premium after news that the White House has not decided on duties. The drop erased the gains from four consecutive record-setting sessions.
Precious metals also declined. Comex gold dropped 1.6% to $4,391.00 an ounce. Silver slid 5.9% to $64.575. Platinum and palladium each lost more than 6%. The selloff occurred as the dollar and Treasury yields firmed. Market odds for a Federal Reserve rate increase rose to about 70%.
Mining Equities Suffer Sharp Losses
Freeport-McMoRan was down over 7% in early afternoon trade. Trading volume exceeded the two-week average by lunch. The company’s market value fell to $101.7 billion. A further 2% drop would push it below the $100 billion mark.
Teck Resources fell more than 6% on normal volume. Southern Copper lost a similar margin, wiping over $10 billion from its value. Antofagasta dropped 7% in over-the-counter trade. Anglo American, Lundin Mining, and First Quantum all fell more than 6%. BHP declined 6% in New York, and Rio Tinto dropped more than 4%.
Tariff Uncertainty Drives Price Action
The White House has not decided on refined copper tariffs. Officials are weighing the risk of higher manufacturing costs ahead of midterm elections. A White House official confirmed the Commerce Department delivered its update. The administration continues to evaluate options to reshore copper manufacturing.
This development contrasts with previous plans for a 15% tariff starting in 2027. The proposed rate was set to rise to 30% in 2028. The market had priced in these duties throughout the year. Hedge funds remained heavily long copper, increasing vulnerability to price swings.
Sector Reverses Record Monthly Gains
The selloff follows the sector's best month on record. The August rally added $357 billion to the value of the world's 50 biggest miners. This was the largest monthly gain in history. Gold rose about 10% during that period. Copper pushed toward $7 a pound on tariff expectations.
The current decline highlights the sector's sensitivity to policy news. The correlation between copper and the S&P 500 sits at multidecade highs. This leaves little cushion when the tariff premium wobbles. Traders are now watching for the next move in US trade policy.
