Copper Prices Plummet as US Tariff Decision Looms

Copper prices plummeted over 3% on Thursday after hitting a record high of $14,875/t on the London Metal Exchange. According to ING's Commodities Strategist Ewa Manthey, this drop is largely due to a pending US decision on refined copper tariffs.

Until now, market participants had assumed that tariffs would go ahead, which led to a tariff premium driving prices beyond fundamentals. However, the latest news has challenged this view and taken some of the tariff premium out of copper prices.

The arbitrage between New York and London markets is also shifting due to these developments. If the tariff premium narrows, shipping more metal to the US will become less attractive, and some stocks could eventually return to international markets.