US Copper Premium Collapses as Tariff Plans Stall
The copper premium paid to ship the metal to the U.S. has dropped sharply after Reuters reported that Washington's plans to impose a tariff on imports had stalled. With copper prices at record highs, the White House is hesitant over tariffs due to concerns they could raise manufacturing costs, offsetting potential benefits of encouraging more domestic mining.
The LME benchmark copper price fell 3% to $14,329.50 a metric ton at 1120 GMT after hitting a record high of $14,875. Prices on the U.S. COMEX exchange were down 4.7% to $6.49 a lb or $14,308 a ton.
Traders and producers have been sending copper to the U.S. since February last year when President Donald Trump ordered an investigation into potential import tariffs. The drop in premium shows how long the market was expecting tariff uncertainty, said one copper trader.
George Griffiths, head of markets at AMT Futures, noted that recent price action is forcing the administration to confront the reality of pass-through to inflation, particularly with crude around $100 a barrel. The front-month COMEX-LME copper spread turned negative in volatile trade, making shipments to the U.S. uneconomic.