Copper Price Surge Blamed on Trump's Tariff Dithering

Copper prices have surged in recent times due to a combination of factors. The Democratic Republic of Congo's (DRC) ban on copper concentrate exports has exacerbated an already tight market situation, according to UBS.

UBS also notes that copper production in Chile and Peru has been disappointing, with cumulative year-to-date output down 4% compared to the same period last year. Weather-related disruptions in Chile and slow project ramp-ups have weighed on supply.

In addition to these supply-side issues, pressures on the demand side are adding to the market's tension. UBS points out that shipments of copper to the United States ahead of a potential decision on refined copper imports have increased, depleting stocks in other regions and pushing prices to historic highs.

Carsten Menke, Head of Next Generation Research at Julius Baer, suggests that President Trump's strategy of doing nothing on the topic of copper import tariffs is becoming increasingly evident to the market. As a result, the US continues to import refined metal, driving up inventory and keeping prices elevated.