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Copper is the third most consumed metal in the world. It is also known as a highly conductive material. The properties of copper include good electrical conductivity, excellent thermal conductivity, corrosion resistance, high ductility, recyclability, and non-magnetic properties. The copper market is segmented by end consumer industries (automotive and heavy equipment, construction, electrical and electronics, industrial and other end consumer industries). Recently, the development of electric vehicles has increased the demand for copper. The leaves, stator, rotor, shaft end, hollow wire and motor used in electric vehicles are composed of heavy copper. Major copper producing countries include Chile, Peru and China. Chile produces more than a quarter of the world's copper, and is by far the country with the largest copper reserves. Escondida, located in the Atacama Desert in Northern Chile and owned by mining company BHP, is the largest copper mine in the world by total copper reserves, production capacity and actual copper output.

A higher US currency slowed demand for dollar-denominated commodities, causing copper futures to drop over 2% to below $4.80 per pound on Friday, reversing gains from earlier in the week. With US President Donald Trump confirming that talks with China are ongoing and that there have been encouraging developments in talks with Japan and South Korea, the dollar strengthened on indications that tensions over international trade are abating. In an effort to further defuse the trade conflict, China is also allegedly thinking about removing its 125% tariff on a number of US imports. Despite boosting overall market confidence, the trade optimism hurt copper prices by making the metal more costly for overseas customers due to the strengthening dollar. Meanwhile, uncertainty persists amid speculation that copper could be included in future trade measures, adding volatility to the market. This same uncertainty has contributed to recent price gains, as traders positioned themselves for potential supply risks.

The Copper's market is trying simultaneously to price in both the broader tariff threat to global manufacturing activity and the specific threat of U.S. tariffs on copper imports. Copper's initial reaction to Trump's tariffs tells you how negative the market thinks the potential hit to manufacturing activity and copper demand will be. Analysts have moved quickly to downgrade their price forecasts on concerns about the dampening effect on global economic growth.