Copper Prices Hit Record as Tariff Speculation Drives Surge

Copper prices have reached an all-time high on the London Metal Exchange (LME) following weeks of intense speculation about US tariffs. The benchmark three-month futures contract gained as much as 0.8% to trade at $14,533 a ton, surpassing its previous record set in January.

The surge in copper prices has been fueled by anticipation that President Donald Trump will expand US tariffs to imports of refined metal. This has led to a significant arbitrage opportunity for traders, with the price premium for copper futures traded on New York's Comex driving record-breaking imports to the US.

Despite growing macroeconomic and geopolitical headwinds, including the war in Iran and rising US borrowing costs, copper prices have continued to rise. The market is still pricing in the possibility of tariffs on primary copper imports, with the Department of Commerce due to issue a report to the White House advising on whether levies are necessary.

The rally has come despite high global stockpiles being concentrated in the US, leading to a shortage of available metal. This has put pressure on holders of short positions and contributed to the record-breaking prices.