According to a Goldman Sachs report released this week, U.S. copper imports could skyrocket by 50% to 100% in the coming months ahead of the Trump administration’s proposed tariffs. This unprecedented surge stems from traders racing to exploit a historic $800-per-ton cross-market arbitrage opportunity before the tariff window closes.
The catalyst for this global copper inventory reshuffle dates back to late February, when the U.S. Commerce Department launched a “national security” investigation into copper imports, marking the first step toward potential tariffs. Although the probe remains ongoing, Goldman analysts note that a 25% tariff—mirroring precedents set for other metals—is nearly certain by year-end. Market signals already reveal an $800/ton premium for CME May copper futures over LME prices, creating a rare arbitrage window.
The tariff countdown is reshaping global copper supply chains, the report emphasizes. A rush of imports could inflate U.S. copper inventories from the current 95,000 tons to 300,000-400,000 tons by Q3’s end, equivalent to 45%-60% of global reported stockpiles. Such drastic redistribution risks depleting available inventories elsewhere, with LME warehouse stocks already plunging to a nine-month low of 147,875 tons.
Notably, Goldman revised its 2025 global copper deficit forecast upward to 180,000 tons. A “scissors gap” between robust electrification demand, China’s stimulus measures, and delayed mine expansions in Chile and Peru—compounded by seasonal factors—could trigger a supply crisis in the second half. The bank maintains its Q3 LME three-month copper price forecast of $10,200/ton but warns that the Sep-Dec spot premium may widen to $350/ton, erasing U.S. import arbitrage margins.
However, investor sentiment remains cautious. Concerns linger that tariff wars could cast a “chilling effect” on future copper prices, leaving markets in wait-and-see mode: CME copper contracts show near-balanced fund positioning, with net longs at just 8,721 contracts. Economists also warn of rising recession risks as the U.S. imposes reciprocal tariffs on China and nearly all trading partners, prompting fund managers to temper optimism about copper’s upside.
This policy-driven inventory redistribution is fueling rare “dual-track” pricing dynamics in metals markets. While U.S. warehouses fill with low-cost spot copper, manufacturers elsewhere may face steep premiums, potentially triggering a profound overhaul of global copper pricing mechanisms.
