LME Copper's Slide to a Seven-Week Low Puts Southeast Asian Importers in a Bind

By Siam Sukkhee Trading Co., Ltd — 2026-06-27 — copper market Southeast Asia

Copper futures hit a seven-week low beneath $6 per pound in late June. Kevin Warsh's Federal Reserve turned hawkish, and suddenly the dollar got stronger, squeezing Southeast Asian buyers from both directions at once.

The drop wasn't subtle.

On June 24, Yangtze spot #1 copper in China fell 940 yuan per ton in a single session. Almost all of the prior week's gains, gone. LME copper futures had been hovering near $6.10 per pound before tumbling more than 3%, landing at levels not seen since early May. If you're importing copper rod into Thailand or Vietnam, you're now paying more in local-currency terms for a metal that's already falling in dollar price. That double bind—a rising greenback hitting commodity valuations while local purchasing power erodes—is the defining feature of this particular selloff for the region's fabricators.

It's brutal.

The Federal Reserve is at the center of it. Kevin Warsh, who replaced Jerome Powell as Chair this year, held the federal funds rate at 3.50%-3.75% at his first meeting on June 17. But the projections that came with that decision were anything but neutral. The median FOMC member now expects rates to end 2026 higher than they are today, or so the reporting said. Markets repriced almost immediately. A hawkish Fed tightens the dollar. A tighter dollar makes copper more expensive for every buyer settling in ringgit, dong, or baht. The channel from Warsh's press conference to a fabricator's margin sheet in Bangkok is short and direct.

Why China isn't rescuing the price

The structural case for copper hasn't disappeared. A single electric vehicle uses roughly four times more copper than a combustion-engine car, and China's grid modernization programs are genuinely running at scale. But the traditional demand sectors—construction, appliances, industrial equipment—remain soft. They're not being fully offset by EV growth. Not even close.

China's NEV output and sales fell 8.8% and 6.9% respectively in the January-February period, according to industry data, after the government pulled back on purchase incentives. I'd say that caught a lot of Southeast Asian copper traders off guard, actually—or maybe it didn't catch them off guard so much as forced them to recalibrate assumptions they'd been living with for two years. Those buyers spent the past few years counting on Chinese green-energy demand as a price floor. That assumption is now getting revised downward.

The stakes for the region are real. Thailand, Malaysia, and Cambodia together account for roughly 67% of Southeast Asia's total copper imports, according to IndexBox market data. Thailand alone consumed around 380,000 metric tons in 2024. Its copper wire exports are worth close to $860 million, which makes the country a significant downstream processor, not just a passive importer sitting on the sidelines. Vietnam is at 305,000 metric tons of demand and finds itself in a similar position: heavily exposed to both the LME spot price and the dollar, with limited hedging infrastructure among smaller fabricators. When copper slides toward $6, their margins compress before they can adjust contract pricing.

And then you're stuck.

Goldman Sachs has argued that grid investment, AI data center buildout, and defense infrastructure spending should keep copper supported over the medium term. That thesis may hold. It probably will, as far as I can tell. But it doesn't buffer a Malaysian wire producer managing inventory in the week after a 3% single-session drop. The structural demand story and the short-term macro pressure can coexist perfectly well. Right now the macro is driving the tape.

What changes the trade?

A softer dollar would help almost immediately. Any signal from Warsh that the rate-hike talk was posturing rather than conviction could push copper back above $6 within days. Broad Chinese stimulus targeting construction rather than just EVs would add another leg to the rally. Don't count on either arriving soon. Warsh spent years on the hawkish end of the Fed debate before taking the Chair. Beijing's property sector is too fragile for the kind of blunt stimulus that would light up traditional copper demand.

Southeast Asian buyers should price their contracts accordingly.

Tags: LME copper, Kevin Warsh, Goldman Sachs, copper price Southeast Asia 2026, LME copper seven-week low June 2026, Fed rate hike copper demand impact