Copper prices on COMEX soared to two-month highs on Thursday as the market attempted to discount the potential for hefty tariffs on US imports after US President-elect Donald Trump takes office later this month.
Prices of the industrial metal on COMEX, part of the CME Group, hit $4.285 a lb or $9,446.82 a metric ton, the highest since November 11, after Trump won the US election and floated the idea of import levies. The contract was last up 1.0% at $4.2795.
Climbing copper prices on COMEX have widened the premium against the copper contract on the London Metal Exchange (LME) to around $400 a ton from near zero at the start of 2025.
Worries about US import tariffs, particularly the threat of a 60% levy on Chinese shipments, the possibility of trade wars and the damage to global trade and growth had initially sent copper on both exchanges lower.
Metal traders expect LME copper prices, which have held up due to a lower dollar, to come under pressure over the coming days and widen the gap against the CME future as short positions — bets on lower prices — on the US exchange are cut.
“The threat of universal tariffs is wreaking havoc on metals markets,” analysts at TD Securities said in a note.
In an attempt to prepare for any tariffs, traders have been shipping copper to the United States. Some of that was deposited in warehouses registered with the CME.
Total copper stocks – warranted and unwarranted — in CME warehouses are at a six-year high of 96,384 tons are up nearly 10% since late November.
“We expect copper inventory to continue to build in CME sheds ahead of the implementation of tariffs, particularly as the CME copper is a duty-paid customs-cleared contract,” BNP Paribas analyst David Wilson said in a recent note.
“We expect that the imposition of tariffs will be reflected in the relative value of CME versus LME copper pricing.”
However, analysts say the US is not as dependent on copper imports as it is on aluminum, zinc and nickel.
“Significant refined (copper) production from Freeport-McMoRan and Rio Tinto Kennecott, among others, accounts for over 55% of US domestic copper needs,” Wilson said.
“Copper sourced from Chile dominates imports, accounting for about 66% or 511,000 tons of refined copper imported into the US last year. Mexico and Canada together accounted for 19% or 142,000 tons of US copper imports last year.”
(By Polina Devitt and Pratima Desai; Editing by Diane Craft)
