Tariff Premium Tested as Copper Prices Near Record Highs

Copper prices have surged due to expectations of US import tariffs, leading traders to rush metal into the US and tighten physical markets.

However, with prices nearing record highs, any policy disappointment could test the tariff premium's durability.

In July, US copper imports exceeded 200,000 tonnes, the highest monthly level in at least 12 years. This trend has contributed to copper trading above $14,000/t, close to its record high.

The London Metal Exchange (LME) inventories have fallen further, and the cash-to-three-month spread has moved deeper into backwardation, indicating increasingly tight physical market conditions.