Traders weighed the risk of potential high U.S. import tariffs on copper, coupled with reports that top producer Chile had suspended shipments, driving copper futures on the Comex to a record high. On Tuesday (March 25), Comex copper surged to $5.2255 per pound, surpassing the previous record of $5.199 set on May 20 last year.
Near-month copper futures have risen 29% this year, leading to an unprecedented disconnect between U.S. copper prices and the global benchmark set by the London Metal Exchange (LME). Since January, U.S. copper futures have traded at a significant premium to LME prices, with the gap widening to a record level after President Trump last month ordered the Commerce Department to investigate potential tariffs on copper imports on national security grounds. On Monday, the spread between Comex and LME near-month contracts hit an all-time high of over $1,400 per ton.
Matt Schwab, Head of Investor Solutions at hedge fund Quantix Commodities, said in an interview: “The uncertainty around tariffs, particularly the timing of implementation, should keep this spread elevated.”
This price gap has given traders a strong incentive to ship copper to the U.S. to avoid potential tariffs. Goldman Sachs and Citigroup expect the U.S. to impose a 25% tariff on copper imports by year-end, prompting traders to rush shipments ahead of the possible levy.
Meanwhile, expectations of strong Chinese demand and Trump’s potential tariffs have drawn refined copper supplies to the U.S. to capitalize on the price spread. On Tuesday, the Shanghai Futures Exchange’s April near-month copper contract closed at 81,900 yuan ($11,277.88) per ton, 0.75% higher than the September contract. When near-month contracts trade at a premium to forward contracts—a condition known as backwardation—it signals concerns over immediate supply.
“The current backwardation is modest, meaning supply worries aren’t severe,” said one copper trader. “The premium exists because China’s copper demand is quite strong at the moment.”
