Copper Rally Runs into Turbulence as Tariff Uncertainty Lingers

Copper prices have been on a tear this year, surging more than 17% on the Comex exchange. The metal touched an all-time high near $6.90 per pound on August 6 before sellers stepped in.

The main driver of this rally has been uncertainty over US import tariffs on copper. The Commerce Department was originally expected to deliver a recommendation by June, but it has yet to be announced, and that uncertainty has encouraged importers to keep stockpiling metal.

This hoarding has starved buyers elsewhere of available metal, tightening inventories on the London Metal Exchange and in China even as US warehouses swell. Supply concerns out of Chile have also added to the squeeze, with Codelco warning that development work at its El Teniente mine could remain suspended for up to two years due to geotechnical issues.

The Democratic Republic of Congo has banned exports of copper and cobalt concentrate, but this is not as significant as it seems. The country already ships most of its copper as refined cathode rather than raw concentrate, and Ivanhoe Mines said that a similar restriction has been in place for nearly a decade.