The global copper market is experiencing significant volatility, with traders closely monitoring President Trump's upcoming decision regarding potential tariffs on refined copper. This uncertainty has kept prices fluctuating, as illustrated by the London Metal Exchange's three-month copper contract recently slipping below $14,000 per tonne to $13,731.58. However, an earlier surge saw September delivery Comex copper jump 3.3% to $6.55 a pound ($14,440 a tonne), nearing a record set in early June, driven by expectations of an import duty.
Market anxiety is particularly high given that the Commerce Department's update on the U.S. copper market was due at the end of June. The proposed tariffs, if implemented, would involve a phased duty on refined copper, starting at 15% in January 2027 and rising to 30% in 2028. This anticipation has already led to a record 630,000-plus tonnes of copper accumulating in Comex warehouses after eight consecutive quarters of builds. Industry experts like Thu Lan Nguyen, Head of FX and Commodity Research at Commerzbank AG, highlight the rising nervousness, noting that the decision could trigger significant price swings in the second half of the year.
The prospect of tariffs has caused a premium for New York copper, with it trading at nearly $600 a tonne above LME prices, more than double the gap from earlier in the week, indicating the market is pricing in a duty on U.S. imports. Concurrently, the physical copper market in China is tightening, with Shanghai stockpiles collapsing 82% since early May and LME inventories down 28% over the same period. This tightening, along with renewed bets on U.S. tariffs, pushed copper to its highest in over a month recently. Copper equities have also responded, with Freeport-McMoRan, the top U.S.-listed producer, jumping 6%, and the Global X Copper Miners ETF climbing over 4%.
Despite the immediate focus on tariffs, analysts offer varied longer-term outlooks. Citigroup projects prices could reach $14,500 per ton in June 2026 and $15,000 within the next year. Goldman Sachs lifted its year-end forecast to $13,735 per ton, while also estimating a global copper deficit of up to 640,000 tons, significantly higher than previous expectations. However, JPMorgan cautions that policy shifts might be less impactful if macroeconomic conditions deteriorate, noting that current copper prices around $13,000 per ton may not fully account for risks like slowing growth and elevated energy costs, particularly if Brent oil prices hover around $110 per barrel.
