US and China Squeeze Global Copper Supplies Ahead of Tariff Deadline

Copper prices have been climbing rapidly in recent weeks, reaching a two-month high of $14,000 a ton in London and nearing the record of $14,500 set back in January. The surge is not due to a shortage in copper supply but rather a scramble by governments in the US and China to stockpile the metal ahead of a tariff deadline.

The immediate driver behind this movement is the US government's Section 232 order, which calls for a phased universal tariff on refined copper starting at 15% in 2027, increasing to 30% in 2028. This has led importers to rush and bring in copper before the deadline, resulting in a record-breaking 200,000 tons arriving at American ports in July alone.

Meanwhile, China is also experiencing a shortage of copper, particularly after Beijing cracked down on tax fraud tied to scrap copper imports, forcing Chinese buyers to seek out refined cathode instead. This has created a squeeze on global buffers, pushing benchmark prices towards fresh all-time highs.