Copper Market Faces Tariff-Driven Tightness Amid Policy Risk

The copper market is experiencing a period of tariff-driven tightness, which could be disrupted by policy changes. According to ING, tariffs imposed on copper imports have constrained supply and pushed up prices. The U.S. consideration of Section 232 tariffs on copper in early 2025 has created uncertainty, prompting stockpiling behavior and a squeeze in available supplies.

While tariffs may support prices in the short term, any easing or removal of these tariffs could lead to a sharp correction. Additionally, global demand remains a key variable, with China's economic slowdown and the green energy transition affecting copper consumption.

Investors should monitor policy announcements from the U.S. administration, as well as inventory levels in LME and COMEX warehouses. A sudden change in tariff policy could trigger significant price movements.