On Wednesday (March 19), the price difference for copper between the New York Mercantile Exchange and the London Metal Exchange surged to over $1,200 per ton, nearing the historic high set in mid-February. This disparity has created a strong incentive for traders and producers to continue shipping copper to the U.S. before the imposition of tariffs. Market expectations that the U.S. will include copper in the list of metals subject to additional tariffs have driven copper prices close to their historical peak. For the first time in months, copper prices have surpassed the $5 per pound mark.
Natalie Scott-Gray, a senior metals demand analyst at StoneX, stated on Tuesday that the rise in copper prices is entirely due to market concerns over the potential imposition of comprehensive tariffs on all imported copper by the U.S. The United States heavily relies on foreign copper, with imports accounting for approximately 45% of its demand.
The U.S. is about to experience a massive influx of copper imports as actions taken worldwide to preempt possible tariffs by President Trump reach a climax. In the coming weeks, between 100,000 to 150,000 tons of refined copper are expected to arrive in the U.S. If all shipments arrive in the same month, it would surpass the record high of 136,951 tons set in January 2022.
At the end of last month, Trump ordered the U.S. Department of Commerce to investigate the potential imposition of copper tariffs on national security grounds. The lengthy investigation by the Commerce Department has opened a longer window for copper shipments.
Both Goldman Sachs Group and Citigroup predict that the U.S. will impose a 25% import tariff on copper by the end of this year. Even with the tariffs, U.S. copper buyers have little choice but to continue purchasing imported copper, as the U.S. consumption of copper is twice its production.
Amid a general increase in copper inventories, U.S. buyers are already considering purchasing more copper from countries like Chile and Peru. Given Trump’s comprehensive tariffs on major U.S. trading partners, some copper from mines in Mexico and Canada might be diverted to Europe. Codelco, the Chilean state-owned producer and already the largest supplier of copper to the U.S., is striving to meet the increased demand from its American customers following meetings with them last month.
