Investor attention is turning to copper after prices edged up on the Shanghai Futures Exchange, buoyed by a sharp decline in the US dollar. But while currency softness typically gives metals a leg up, an intensifying trade dispute between the US and China is casting a shadow over future gains.
Copper futures on the Shanghai Futures Exchange (SHFE) traded higher at the start of the week, with the most-traded contract up 0.6% to 76,480 yuan (around $10,494) per tonne. The rally comes amid a notable weakening of the US dollar, which has slipped to a three-year low. With the London Metal Exchange closed for Easter Monday, the SHFE has taken the lead in price action.
The decline in the dollar has been triggered by mounting concerns over US monetary policy, with fresh uncertainty surrounding the independence of the Federal Reserve. Speculation around President Trump’s intentions to reshape the central bank has shaken investor confidence, undermining faith in the US economic outlook. For dollar-priced commodities like copper, this kind of currency movement typically bolsters buying power and attracts international interest.
However, the upside potential remains constrained by geopolitical friction. China, the world’s largest consumer of industrial metals, has issued a sharp warning against countries aligning with the US at its economic expense. The Chinese ambassador to the US, Xie Feng, reaffirmed Beijing’s commitment to defending its national interests while calling for a path of peaceful coexistence. The rhetoric marks a new phase in the trade dispute, signalling that retaliatory actions could escalate further. For investors, this could introduce near-term volatility and curb the bullish momentum for base metals.
Despite the uncertain macro backdrop, other metals also posted moderate gains on SHFE. Aluminium rose 0.7% to 19,840 yuan per tonne, zinc climbed 0.98% to 22,230 yuan, and lead added 0.7% to reach 16,930 yuan. Tin saw a stronger uptick of 1.2%, reaching 259,700 yuan, while nickel edged 0.4% higher to 126,120 yuan. These price movements suggest underlying resilience in physical demand, even amid macroeconomic noise.
What’s clear is that currency shifts remain a key driver for metals pricing, but the overriding narrative is geopolitical. With China and the US locked in a war of words and retaliatory trade policies, base metals markets are walking a tightrope between fundamentals and politics. Investors with a long view will be closely monitoring any de-escalation signals, as a thaw in tensions could unlock suppressed value across the metals complex.
Shanghai’s copper uptick is more than just a technical bounce, it’s a signal of shifting capital flows in a world where currency and diplomacy intertwine. For now, optimism is tempered by uncertainty, but the underlying demand from China offers a strong floor to the market.
Jubilee Metals Group plc (LON:JLP) is a diversified metal recovery business with a world-class portfolio of projects in South Africa and Zambia. The Company’s expanding multi-project portfolio across South Africa and Zambia provides exposure to a broad commodity basket including Platinum Group Metals, chrome, lead, zinc, vanadium, copper and cobalt.
