BNP Paribas predicts copper ‘collapse’ once tariffs take effect

Copper prices are set to “collapse” over the next few months as a worldwide dash to ship the metal to the US ahead of possible tariffs comes to an end, according to BNP Paribas.

Prices for the bellwether industrial metal hit a nine-month high above $10,000 a ton on the London Metal Exchange earlier this week, amid warnings that efforts to front-load US imports ahead of tariffs proposed by US President Donald Trump would leave the rest of the world critically short of metal.

However, prices have come under pressure after Bloomberg reported that the US administration aims to introduce tariffs on copper imports within weeks, instead of months as had been widely anticipated. A swift implementation would leave little time for traders to divert more metal to the US, and BNP sees prices slumping to $8,500 a ton by the end of the second quarter as America’s appetite for metal dries up.

“We expect the imposition of tariffs to end the current copper pricing dislocation, enabling the market to focus on the negative demand impact of US trade policies,” David Wilson, BNP Paribas’ senior commodities strategist, said in an emailed note. “We expect prices to collapse in Q2 2025.”

Commodities have been jolted this year as investors react to the US administration’s imposition of trade levies, plus the threat of many more curbs to come, including a raft of announcements due next week. Trump has ordered a probe into copper flows, ahead of which traders have been racing to shift cargoes to the US.

But with the expected timeline for tariffs shortening, several analysts have been revising down their price forecasts as worries about demand mount.

BNP Paribas said it now expects copper consumption to grow by 2.3% this year — from 3.1% previously — and sees supply outstripping demand by 460,000 tons, up from 124,000 tons in a prior forecast.

“It is simple economics; less global trade means less global growth,” Wilson wrote. “This is the key factor that prompts us to up our copper market surplus expectation.”

Copper was 0.2% lower at $9,827.50 a ton on the London Metal Exchange at 3:38 p.m. local time, after reaching the highest since June on Wednesday.

Among other metals, tin spiked as much as 3.9% on the LME after a 7.7-magnitude earthquake struck Myanmar, a major producer.

Read More: Can Trump’s critical minerals drive pass the copper test?