Copper reached a new all-time high in New York, with September delivery touching $6.7045 per pound ($14,781 per tonne) on Comex, surpassing the previous intraday peak of $6.69 in mid-May. The metal's value has risen 17% this year in New York. This surge is primarily attributed to expectations of US import tariffs, which have led to a significant influx of metal into the country, while global supply outside the US continues to dwindle. In London, copper also hit $14,050 a tonne, closing in on January's record of $14,500.
The market's dynamics are heavily influenced by the impending decision from the US Commerce Department regarding refined copper import tariffs. The deadline for Commerce Secretary Howard Lutnick's recommendation on phased duties, starting at 15% in January 2027 and potentially rising to 30% the following year, has passed without an announcement. The administration is also considering extending existing 50% tariffs on semi-finished products to raw metal and adding 14 more product categories, including electric conductor cables, to Section 232 duties.
Traders are actively responding to these tariff speculations, with over 200,000 tonnes of copper arriving at US ports in July, marking the largest monthly inflow since 2014. Comex inventories have increased over 40% this year to record levels, and the total US hoard, including private storage, is estimated to be well above 1 million tonnes. Michael Cuoco, head of metals at StoneX Financial, noted that "the tariff arbitrage is ruling the roost over demand growth."
Despite high inventory in the US due to tariff-driven hoarding, global supply is facing significant challenges. The closure of the Strait of Hormuz has severely impacted seaborne sulfur shipments, and China's export ban on sulfur until December has reduced global sulfuric acid supplies by approximately a quarter. This is critical for the SX-EW process, which accounts for over 15% of global copper output, particularly in regions like the DRC and Chile, where some operations have only 30 to 60 days of acid inventory. Additionally, Codelco paused the Andes Norte expansion at its El Teniente mine in Chile due to seismic concerns, further constraining output and making it unlikely for the state miner to reach its 1.7 million tonne annual production target within five years.
Analysts from ANZ Group Holdings Ltd. predict that copper has the potential to reach a record high early next year. They cite the combination of US tariff concerns, ongoing supply challenges at mines, and resilient global demand, including investment in electric vehicles and new-energy infrastructure, as key drivers. Morgan Stanley, which initially expected modest growth in mine supply, now anticipates a decline, with International Copper Study Group data showing a 1.1% drop in output in the first half of the year. Copper has already risen 15% this year and more than 50% over the past year, with forecasters like BMI expecting structural deficits to drive prices even higher into the next decade.
