Miners Push FTSE to Record Highs Amid Tariffs

UK mining stocks provided the FTSE with a final push over the top as investors believe British stocks offer good value amid expected higher copper prices resulting from tariffs.

Miners Up on Tariff Threats and Demand

after President Donald Trump threatened to slap a 50% tariff on copper imports, including semi-finished products. However, the deadline for when the tariffs will take effect has not been disclosed. Trump said the move was aimed at protecting domestic miners, noting that the US is the world's fifth-largest producer, with 1.1 million tonnes produced in the previous year. Although this is behind China's 1.8 million and below the world's largest producer, Chile, at 5.3 million, the US used to be the world's largest producer. However, , which has allowed other countries to take the lead. Analysts attribute this trend to multiple factors, including the difficulty of obtaining permits to develop new resources in the US and declining ore grades.

Meanwhile, . Even the IEA warned of a potential shortage as demand for the energy transition ramps up. caused by the tariffs is also expected to increase copper prices, driving up demand for mining stocks. This is what helped push the FTSE 100 to a new record high on Thursday. The index includes major copper producers such as Anglo American, Rio Tinto, and Glencore, as well as Antofagasta, which is as close to a "pure play" copper miner as one can expect. The company was in particular focus because it is , which the prior Administration blocked due to environmental concerns. CEO Ivan Arriagada said that the tariffs present an opportunity to advance the development of its Twin Metals copper and nickel mine in Minnesota. However, it takes between 10 and 15 years under the current regulatory environment to get a project approved in the US.

New Records for Footsie Ahead?

The developments have only been the latest push higher. The FTSE has been on the rise, albeit with a tariff-related hiccup in April, and is . The index has been advancing in tandem with its European counterparts, as analysts suggest it offers relatively attractive valuations. Individual stocks, such as Rolls-Royce, were partly helped by a general rise in defence stocks, which helped push the FTSE higher. As European powers have to step forward in defence spending and the US turns its focus to the Far East, this could continue to be the case.

In the UK, Britain has already agreed on a trade deal with the US and is not a major copper exporter, allowing traders to look past the latest salvo in the trade war, essentially. On Friday, the FTSE pulled back from its record high after it was reported that . However, increased calls for easing from the BOE could help the stock market in the long run.

Can FTSE–100 Hold the 8900 Line?

In the long term, the Footsie has been on an upward trend marked by the ascending trendline connecting 5500 and 7550. Above 8500 and now the previous record peak of 8900, a break of the 9000 handle could set the stage for the next leg towards 9250 – round levels often work well during price discovery stages. In the short term, the 20-week VWAP stands at 9040, with the 8540 average serving as potential support in the event of continued pullbacks below the local low at 8670. However, as long as prices trade above 8000 and the lower autotrend extension, currently at 7680, remains intact, the long-term bias remains in place.

Source: SpreadEx | UK 100, Daily

Key Takeaways

The FTSE-100 reached record highs amid a surge in mining stocks, driven by expectations of higher copper prices following threats of US tariffs on copper imports. Tariffs, along with rising demand for copper in the energy transition, are expected to create a supply shortage. Major UK copper miners, including Anglo American, Rio Tinto, Glencore, and Antofagasta, benefited from this trend, with Antofagasta attempting to advance its Twin Metals copper project in Minnesota. While the UK economy contracted in Q2, calls for easing from the BOE could also boost the Footsie.