Copper Prices Soar as Tariff Uncertainty Persists

Copper prices have surged to fresh records on the London Metal Exchange (LME), reaching nearly $14,800 per tonne in three-month futures. This rally is driven by expectations of US tariffs on refined copper imports, which has tightened availability outside the US and squeezed short positions.

According to ING's commodities team, tariff positioning has pulled large volumes of metal into the US, resulting in record-high inventories on the COMEX. Meanwhile, less metal is available outside the US, putting pressure on short positions.

The market is waiting for President Trump's decision on refined copper tariffs, with a proposed 15% duty from January 2027 and a potential increase to 30% in 2028 if approved. If tariffs are implemented, they would continue to draw metal into the US, keeping prices elevated.

However, if tariffs are delayed or ruled out, particularly with subdued demand, copper prices could correct sharply. ING's commodities team expects copper prices to remain elevated while tariff uncertainty persists.