Copper Prices Soar on Tariff Fears and Supply Disruptions

Copper prices have been rising to near record levels due to fears of tariffs and supply disruptions. The London Metal Exchange (LME) copper stocks experienced a significant drawdown in the week ended on August 28, with open tonnage falling from 166,775 metric tons on August 19 to 107,050 MT on August 26.

In China, Shanghai Futures Exchange stocks fell by 19.1 percent to 72,428 MT. However, in the US, inventories are at a record high of 758,889 short tons due to traders accelerating imports before a January 1, 2027 deadline that will impose a 15 percent tariff on refined copper.

The market is also facing significant supply disruptions, including a halt in production at Codelco's El Teniente operation in Chile due to seismic risks. Additionally, the Gresik smelter in Indonesia was shut down after a furnace failure caused a leak of molten material.