Copper Prices Soar on US Tariff Fears

Copper futures have reached a record high of almost $6.90 per pound after rising for over a year, and analysts are using the spread between US COMEX copper futures and London Metal Exchange prices to gauge potential US tariffs on refined copper.

The spread has traditionally been used by traders to benefit from temporary price differences and manage risk between the two markets, but Societe Generale analysts say the prospect of fresh Section 232 tariffs on refined copper has changed its role.

The United States already imposes a 50% levy on imports of semi-finished copper products and certain other copper-made products, and the Commerce Department has recommended a phased universal tariff on refined copper: 15% from January 1, 2027, increasing to 30% on January 1, 2028.

Societe Generale estimates that the current COMEX premium implies a 14.6% likelihood of a 15% tariff in January 2027 and a 37% probability of a 30% duty in January 2028.