Tariffs Reshape COMEX-LME Copper Arbitrage, Pricing in Policy Risk

Copper trading has become increasingly influenced by U.S. Section 232 tariffs, which have reshaped the arbitrage mechanism between COMEX-LME copper prices.

Societe Generale analysts Michael Haigh and Jeremy Sellem argue that copper has effectively become a policy-driven asset due to the tariffs.

The bank's Copper Cross-Asset (CCA) analysis suggests that the COMEX premium is structurally wider, mean-reverting towards approximately $33 per metric ton over the long term.

Market-implied probabilities indicate a 14.6% chance of a 15% U.S. refined copper tariff by January 2027 and a 37% chance of a 30% tariff by January 2028.