Copper traders are growing increasingly cautious about the sustainability of the metal’s bull market as Donald Trump’s second term progresses. The surge in copper prices has been driven by fears of potential tariffs under Trump’s administration, which has led to a significant reshuffling of global inventories. Until recently, copper futures in New York traded at persistent premiums over the London Metal Exchange (LME) benchmark, allowing traders to profit from shipping copper to the US before any tariffs are imposed.
The ongoing US imports have created a feedback loop, depleting inventories outside the US and pushing LME prices to a record near $15,000 a metric ton last month. However, as Trump nears the halfway point of his second term, market participants are becoming wary that prices could crash if tariffs fail to materialize. This uncertainty is causing traders to reassess their positions, fearing a potential reversal of the recent gains.
The market’s bullish sentiment has been largely fueled by the anticipation of tariffs, which has driven up prices and led to a surge in US imports. But with no clear indication of when or if tariffs will be implemented, the risk of a price correction is looming large. Traders who have profited from the current premiums are now considering the possibility of a sharp decline if the expected tariffs do not come to pass.