Copper Futures Hit Record High on Tariff Fears

On Tuesday, the price of copper futures on the New York Commodity Exchange (Comex) surged to a record high, as traders digested the potential impact of high import tariffs on this crucial industrial metal, imposed by U.S. President Trump.

The price of copper on Comex reached $5.2055 per pound by 9:56 AM New York time, surpassing the previous record of $5.199 per pound set on May 20. This year alone, the price of copper futures in the U.S. has risen by approximately 29%, creating an unprecedented gap between U.S. copper prices and the global benchmark, the London Metal Exchange (LME) copper price.

Since January, U.S. copper prices have been rising above LME prices. Following Trump's order last month for the Commerce Department to investigate imposing tariffs on imported copper for national security reasons, the price difference between the two markets reached an all-time high. On Monday, the price difference between the nearest-month contracts on Comex and LME exceeded $1,400 per metric ton, setting a new historical record.

This price disparity has incentivized traders to transfer copper to the U.S. in anticipation of potential tariffs, further widening the gap. Analysts at Goldman Sachs and Citigroup predict that the U.S. may impose a 25% import tariff on copper before the end of the year. Traders anticipate a significant influx of copper into the U.S. before the tariffs take effect.

Kostas Bintas, head of metals trading at Mercuria, estimates that approximately 500,000 metric tons of copper are currently en route to the U.S., which could strain copper supplies in other global markets. He predicts that as shortages intensify, LME copper prices could surge past $12,000 per metric ton.