Copper Prices Soar on Tariff Fears and Inventory Shift

Copper prices have hit a new record on the London Metal Exchange (LME), reaching $14,533 per ton. This comes as investors are bracing for potential US tariffs on copper imports, which has driven up demand and squeezed supply.

The market surge is not just about growing end-demand, but also where the metal is being stored and what policymakers might do next. A premium on Comex futures has opened up arbitrage opportunities, leading to a shift in inventory storage from US exchanges to global warehouses controlled by LME.

This has resulted in tight near-term availability elsewhere, pushing prices to record highs despite a lukewarm demand environment. Miners such as Rio Tinto Group, BHP Group, Glencore Plc, and Zijin Mining Group Co. have benefited from the increased copper prices, reporting significant profit gains.

However, operations across the industry have not been smooth, with Chile's August copper export revenue slipping to its lowest level in over a year. Global mined output is on track for its first annual drop since 2017, according to Michael Cuoco of StoneX.