Copper Prices Soar Amid Tariff Fears and Mine Disruptions

Copper prices have reached an all-time high on the London Metal Exchange (LME) due to concerns over US tariffs and disruptions in mining operations. Three-month copper futures temporarily surged by 0.8% to $14,533 per ton, surpassing the previous record set in January of this year.

Copper has seen a 47% increase in price over the past 12 months, largely driven by a long-term supply and demand imbalance. The aging large-scale mines are struggling to meet the growing demand from industries such as semiconductors, batteries, and renewable energy generation.

The recent price hike is also attributed to the anticipation of US tariffs on refined copper. Hundreds of thousands of tons of refined copper have been front-loaded into the US this year, taking advantage of potential profits before the tariffs are imposed. However, the uncertainty surrounding the tariffs has led to a surge in copper inventories, with nearly eightfold increase from 80,000 tons in February last year.

Cristian Cifuentes, a senior analyst at the Chilean Copper and Mining Study Center (Cesco), stated that 'the possibility of tariffs is having a greater impact on trading than final demand excess.' He added that it's a case of localized shortage rather than global demand excess.