Copper Market Selloff Repriced Futures Amid Tariff Uncertainty

The copper market experienced a sudden drop in prices due to uncertainty over refined copper tariffs. The White House has yet to make a decision on the proposed 15% tariff, which is set to take effect from January 2027 and rise to 30% in 2028.

As a result of this uncertainty, COMEX warehouse stocks reached a record high of 696,259 tonnes in the week to September 11. This is more than double the combined LME and Shanghai Futures Exchange stocks, which stood at 235,000 and 63,000 tonnes respectively.

The physical market barely moved during this time, with the LME cash settlement remaining flat at $14,390 per tonne. However, the futures curve broke, with COMEX October copper futures falling 4.2% to $6.5355 per pound on September 10.

Mine production data from ICSG shows that world mine output fell 1.1% in the first half of 2026, while refined supply ran a surplus of 131,000 tonnes over the same period. Treatment charges at smelters settled at zero for 2026, with spot terms below that.

This has led to a shift in margin from smelters to mines, as smelters lose their largest fee line. Concentrate is now scarce, while cathode is abundant.