Copper price surpasses $11,000 as tariff fears drive rally

Copper prices scored another high on Thursday, surpassing the $11,000-a-tonne mark in New York, amid global trade dislocations triggered by US President Donald Trump’s push for tariffs.

Trump last month ordered his Commerce Department to investigate the nation’s imports of copper as a likely precursor to imposing duties. Since then, US prices have spiked and traders have rushed to send metal to America ahead of any tariffs, in turn reducing availability in the rest of the world.

Copper futures on the COMEX rose 0.3% to trade at about $11,270 per tonne by 1 p.m. ET. This represents a premium of almost 13% over trading on the London Metal Exchange, where the metal just crossed the $10,000 mark.

“This is a round of cross-regional repricing triggered by potential US tariffs,” Wei Lai, deputy trading head at Zijin Mining Investment Shanghai Co., told Bloomberg. “Cargoes are lured to the US, leaving other places in shortfall. Buying sentiment is very strong.”

Copper’s surge is just one part of the turmoil unleashed by Trump’s bid to reshape global trade and bolster defenses for some parts of the US economy. So far, he has slapped 25% import levies on steel and aluminum, hit Canada, Mexico and China with duties, and promised sweeping “reciprocal” tariffs starting next month.

The investigation into copper imports is unlikely to deliver its recommendations until later this year, but Goldman Sachs Group Inc. and Citigroup Inc. are among those anticipating the US will impose 25% import duties by the end of 2025.

Price spread

Comex copper prices are now up 27% since the start of the year, while the LME price is about 14% higher. The big gap has created a huge incentive for traders and producers to keep moving supplies to the US, and more than 100,000 tons may be on its way.

Major commodities players including Trafigura Group and Glencore are among those diverting the metal from Asia, according to sources cited by Bloomberg.

The trade ructions have sucked copper from the LME’s global network of warehouses, but other factors are also underpinning the price rally. Copper typically benefits from a weaker dollar, and the greenback has softened notably since Trump returned to the White House.

Copper also has support from tight spots in its supply chain: smelters are suffering as a frenzy of expansions has left them fighting to secure raw materials. There have been many bold price forecasts over recent years predicated on the risk of shortages as demand from green industries expands. Major miners such as BHP Group and Rio Tinto want to produce more.

While traders and investors are expected to reap profits from moving copper around, US manufacturers are paying costs that already price in a hefty tariff. Separately, aluminum premiums in the US reached a record high last week, when Trump’s blanket 25% import duty came into force.

(With files from Bloomberg)