Since the White House announced a comprehensive investigation into potential tariffs on copper citing national security concerns, copper prices have continued to climb. Earlier this week, industrial copper prices on the London Metal Exchange surged to a nine-month high above $10,000 per ton. The most actively traded copper futures contract in New York also hit a record high, creating a significant price gap between the two sides of the Atlantic. Estimates suggest that hundreds of thousands of tons of copper are already en route to the U.S.
Chile’s Codelco, the world’s largest copper producer, has redirected some of its spot sales to the U.S., CEO Ruben Alvarado said on Friday. He sees no justification for sanctions or tariffs on copper and expects long-term demand to remain robust, unaffected by short-term fluctuations.
However, BNP Paribas warned on Friday (March 28) that copper prices could face a sharp decline in the coming months as the global rush to ship copper to the U.S. ahead of potential 25% tariffs begins to fade.
The bank noted that an earlier-than-expected tariff implementation would limit the window for copper rerouting to the U.S. and projected that prices could drop to $8,500 per ton by the end of Q2 as U.S. demand slows. David Wilson, the bank’s senior commodity strategist, stated that the tariffs would end the current price distortions, refocusing the market on the negative demand impact of U.S. trade policies.
BNP Paribas also lowered its global copper consumption growth forecast to 2.3% (from 3.1%) and expects a surplus of 460,000 tons, a significant increase from its previous estimate of 124,000 tons.
Not all analysts share BNP Paribas’ bearish outlook. Some argue that copper’s long-term prospects remain strong due to accelerating global electrification. Kyle Rodda, senior market analyst at Capital.com, noted: “The copper rally is partly driven by China’s stimulus measures and economic recovery, and partly by tariff concerns. Amid supply constraints pushing prices higher, we may be witnessing a demand surge. A weaker U.S. dollar is also contributing.”
