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Daily Base Metals Report

Markets Rattled as Tariff Tensions Escalate

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • Markets rattled as US triggered broad-based import tariffs
  • Base metals declined following the tariff announcement, which included an exemption for a list of metals, such as aluminium and steel, while maintaining no tariffs on copper.
  • Dollar slumped while gold rebounded slightly amid rising trade war fears

Macro

US stocks opened lower following President Trump’s announcement of new tariffs. The revised policy imposes a 10% baseline tariff on all US imports, with higher duties aimed at key trading partners: 20% on goods from the EU, 24% on Japanese imports, 25% on South Korean products, and 32% on imports from Taiwan. The move has heightened global trade tensions, prompting a broad sell-off across risk assets and raising fears of a prolonged economic slowdown. The dollar index slumped to 101.4, its lowest level since early October 2024, as concerns mounted over the economic fallout of retaliatory measures from affected nations. Meanwhile, the 10-year US Treasury yield dropped sharply to just above 4.0%, its lowest level since last autumn, as investors turned to government bonds for safety.

Base Metals

Base metals reflected the broader market sentiment as they sold off sharply today. Following Trump’s tariff announcement yesterday, a list of minerals was excluded from a package of reciprocal tariffs. As a result, aluminium imports will continue to face a 25% tariff, with additional products such as empty cans and canned beer subject to the same tariff starting April 4th. Currently, copper imports are not subject to any specific tariffs; however, there are speculations that further levies could be imposed in the future.

This led to a significant decline in COMEX copper, which had been under strong upward pressure since the beginning of the year. Consequently, LME prices corrected sharply, with copper dropping to $9,366.50/t. Aluminium also followed this downward trend, falling below the critical support level of $2,500/t to $2,448/t, marking a low not seen since September 2024. Zinc decreased to $2,713.50/t, negating the gains made earlier in the year. Even tin, which had been benefiting from supply disruptions in mining, softened today to $37,334/t.

We expect that copper will continue to act as the main driver for the overall momentum in metals complex. As long as no tariffs are applied on copper, we are likely to see continued downward pressure. The support level at $9,310/t is now critical; a break below this level could indicate that market concerns are shifting from supply disruptions to demand issues.

Precious Metals and Oil

Precious metals were caught up in the wider market volatility. Gold briefly dipped below $3,060/oz in early trading but rebounded to trade above $3,120/oz, supported by safe-haven flows and speculation that further gains may lie ahead amid escalating trade uncertainty. Silver dropped to test the $32/oz support level before recovering slightly. Oil prices also fell sharply, with WTI declining to $66.2/bbl and Brent to $69.6/bbl, as traders reassessed global demand prospects in light of the intensifying trade conflict.

Lme Metals Price And Volume 03042025 (1)

All price data is from 03.04.2025 as of 17:30

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

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