Copper Tariff Premium Faces Test as Imports Reach 12-Year High

Copper prices have surged due to expectations of US import tariffs, causing traders to rush metal into the US market and tighten physical supply. The tariff premium has been a major driver of copper's rally, with prices nearing record highs.

According to data, US copper imports exceeded 200,000 tonnes in July alone, marking the highest monthly level in at least 12 years. This influx of metal has put pressure on the market, with LME inventories falling further and the cash-to-three-month spread moving deeper into backwardation.

The tight physical market conditions have supported copper prices, which are currently trading above $14,000/t. The question now is whether this tariff premium will hold up to any policy disappointments in the US.