Copper price touches new high as traders predict $12,000

Copper prices scored another record on Wednesday after reports that a US tariff on the key industrial metal is coming sooner than expected.

The most-traded contract on the COMEX rallied to a new high of $5.3740 per lb., compared to the previous day’s settlement price of $5.2105. The surge in US copper futures also extended the price gap between New York and London, which, at the new record, would be approximately $1,700 a tonne.

Copper’s new record — equating to roughly $11,840/tonne — comes a day after major traders predicted at a Financial Times commodities summit in Switzerland that the metal could reach at least $12,000 a tonne this year as supply concerns flare up globally.

Kostas Bintas, global head of metals and minerals at Mercuria, said the copper market is already “experiencing tightness”, referring to the huge amounts of copper imports into the US that have reshaped the market. He estimates that about 400,000 to 500,000 tonnes of the metal are already on the way to the US, with traders anticipating copper to be added to the list of tariffs later this year.

Analysts including those from Goldman Sachs had expected a 25% copper tariff to be implemented between September and November, but Bloomberg reported on Wednesday that the tariff could come much sooner than that.

Traders are also bracing for higher industrial demand for the metal given the need for major economies such as the US and EU to upgrade their electricity grids. This investment would require huge amounts of the metal, said Aline Carnizelo, managing partner at Frontier Commodities, part of the group of experts eyeing the $12,000 price target.

Graeme Train, head of metals and minerals analysis at Trafigura, said at the Swiss summit that copper could hit a new high due to the high demand, but cautioned that the global economy was “a little fragile”.

Read More: Copper supply in Asia tightens as tariff risks spur anxiety