Copper prices are heading for a weekly loss, with COMEX copper futures falling by approximately 4.4% to $6.59 per pound, after reaching a record $6.89 a day earlier. This downturn follows reports that the White House has not yet made a decision on imposing tariffs on refined copper, casting doubt on a measure the market had largely anticipated. The hesitation stems from officials weighing the benefits of boosting domestic mining against the potential for higher manufacturing costs and broader affordability concerns, particularly ahead of upcoming elections. This uncertainty has led to a significant sell-off in copper prices, which had previously been driven higher by tariff expectations.
The potential for tariffs had caused market distortions, with massive amounts of copper being shipped to the United States to pre-emptively secure supplies before any duties took effect. This influx pushed COMEX prices above those on the London Metal Exchange (LME) and led to a record 220,000 tonnes of copper flowing into the US in July, with total COMEX warehouse holdings reaching around 680,000 metric tonnes by early September. This stockpiling behavior, driven by the "tariff premium," drained supplies elsewhere and contributed to elevated global copper prices. However, with the tariff decision now uncertain, this premium is narrowing, and some of these US-held stocks could eventually return to international markets.
The uncertainty surrounding tariffs has not only impacted copper prices but also led to a decline in the shares of major copper producers. Freeport-McMoRan, the largest US copper producer, saw its stock drop by 7.2% to $70.78. Other mining companies also experienced significant losses, including Teck Resources, down approximately 6.8% to $65.54, Hudbay Minerals, down 7.7% at $26.60, Rio Tinto, which fell 4.2% to $99.33, and Antofagasta, which declined 6.1% to £37.52 ($50.77). These declines reflect investors reassessing the impact of tariffs that had previously bolstered copper and mining shares.
While the long-term fundamentals for copper remain supportive, with mined output declining by 1.1% year-on-year in the first half of 2026, the refined market is not yet facing an outright shortage. Refined production actually increased by 2.4% in the first half, resulting in a preliminary surplus of approximately 131,000 tonnes, according to the International Copper Study Group (ICSG). Indicators of immediate market tightness have also eased, with LME inventories stabilizing and pressure at the front of the LME curve subsiding. The current reversal in prices underscores how vulnerable the market is to any weakening in tariff expectations, even as the longer-term outlook remains positive.
