On the 7th local time, Trump signed an executive order to extend the so-called "reciprocal tariff" moratorium period, postponing the implementation from July 9th to August 1st.
On Monday this week, the overall sentiment in the nonferrous metals sector was poor. The main contracts of Shanghai copper, Shanghai aluminum, Shanghai nickel and Shanghai zinc all dropped by more than 1% on the day, and the main contract of Shanghai tin fell by more than 2%. July 9th is the deadline for the United States to suspend tariff measures on relevant trading partners, and the market is closely watching the progress of tariff negotiations.
The nonferrous metals sector as a whole declined, and market sentiment was poor, mainly due to the marginal weakening of macro positive factors. Ji Xianfei, an analyst of nonferrous metals at Guotai Junan Futures, said that previously, when Trump signed the "Big and Beautiful" bill, the market believed that the bill was controversial and might exacerbate social injustice and fiscal imbalance. In addition, the trade negotiations between the United States and Europe, as well as between the United States and Japan, have all entered critical stages. If no agreements can be reached, it will have a significant impact on the exports of the relevant countries and regions. Currently, the latest tariff threat from the Trump administration has disturbed market sentiment, and some funds are selling off risky assets.
Wang Yunfei, the head of the investment consulting department of Shanjin Futures, told reporters that the current market expectations mainly change around the US "reciprocal tariff" policy. Although the market expects the extent of tax hikes in the United States to decline, the resumed trade frictions may last longer, having an adverse impact on global economic growth and the demand for non-ferrous metals.
From the perspective of pricing, Ji Xianfei believes that the US June non-farm payroll data exceeded expectations, indicating that the US job market remains tight and the economy is relatively resilient. The weakening of expectations for the Federal Reserve to cut interest rates has led to a rebound in the US dollar index, thereby suppressing the prices of risky assets. Meanwhile, as the demand enters a slack season, the demand for photovoltaic modules and exports has started to decline. The production scheduling of home appliances has weakened significantly. High temperatures have led to a decline in the operating rate of downstream industries and a weak willingness to replenish inventories. Social inventories of multiple non-ferrous metal varieties have begun to accumulate.
Xiao Jing, chief analyst of nonferrous metals at Guotou Futures, said that in July, the two leading varieties of copper and aluminum entered the off-season of demand, and social inventories increased slowly. The fundamentals may shift from the "strong reality" of previous transactions to the "weak expectation" of current transactions. Looking at other varieties, factors such as the decline in demand for galvanized products and the recovery of production after the increase in concentrate processing fees have suppressed zinc prices. The medium and long-term fundamental expectations for tin are also relatively weak.
How will Trump's renewed threat of tariffs affect the non-ferrous metals market?
Ji Xianfei said that Trump's relevant remarks mainly affected the prices of non-ferrous metal varieties through two channels: First, the tariff policy led to a relatively pessimistic market sentiment, and the market's risk aversion sentiment might rise; Second, trade frictions may drag down global economic growth and thereby affect the demand for bulk commodities.
Xiao Jing believes that the current non-ferrous metals market needs to pay attention to two points: First, the situation of tariff negotiations between the United States and relevant trading partners; The second is the economic recovery situation of major economies, especially the macroeconomic data of the two major economies, China and the United States. Entering the third quarter, the production schedules for domestic sales and export orders of home appliances in China have "cooled down", and most well-known institutions have lowered their forecasts for the global economic growth rate in 2025.
After Trump announced the "reciprocal tariff" policy in the first half of the year, global financial markets experienced severe fluctuations. Taking this as a reference, if the tariff policy returns, the market will be in turmoil again. However, considering that the intensity and sustainability of the tariff policy may be weaker than expected, it is expected that the long-term actual impact will be relatively limited. Wang Yunfei said that the main reason for the recovery of non-ferrous metal prices in the second quarter was that short-term demand was stronger than expected. Demand is likely to return to normal in the second half of the year, which is not conducive to further price increases. Once the US "reciprocal tariff" policy is restored, demand pressure may increase more than expected, thereby depressing prices.
Given that the uncertainty of policies is hard to eliminate, we believe that market participants should take fundamentals as the main trading logic in future transactions and be vigilant about the risks brought about by policy changes. Wang Yunfei said.
Ji Xianfei said that on the macro level, the various policies of the Trump administration may continue to disturb market sentiment, making remote trading in the nonferrous metals market more cautious. At the micro level, it is currently the off-season for consumption, and terminal consumption shows a marginal weakening trend. However, August and September are the peak seasons for consumption, and it is necessary to pay close attention to the support of domestic policies for consumption.
In the second half of the year, domestic consumption may show structural changes. The growth rate of real estate completion and construction will be relatively low, the new installed capacity of photovoltaic power will decline year-on-year, and the growth rate of home appliance production may slow down. However, the growth of infrastructure investment such as power grids will support the terminal consumption of non-ferrous metals. Compared with the first half of the year, the growth rate of terminal consumption may slow down. In addition, there are significant differences in the fundamentals of different non-ferrous metal varieties. Among them, the processing fee for copper concentrate has declined, overseas copper smelting has been continuously disturbed, and the output of refined copper has dropped. The loose supply of zinc ore will continue to be passed on to the smelting end, and the supply pressure of zinc ingots will gradually increase. The elasticity of nickel supply may limit the price space above. Ji Xianfei said.
