Benchmark copper on the London Metal Exchange rose 0.4 per cent to $13,687.50 a tonne on Monday morning in Shanghai trading, while the US Comex contract climbed 1 per cent to $6.45 a pound, putting it on course for its highest close since mid-May. The gains reflected renewed positioning before a June 30 deadline for the US Commerce Department to update President Donald Trump on domestic copper markets, refining capacity and whether duties on refined copper should be phased in from next year.
Washington’s tariff process has become the dominant force in copper trading. The administration placed a 50 per cent tariff on copper products and derivatives last year, but refined copper was spared after an earlier market rally had pulled large volumes into the United States. The option now under review is a universal import duty on refined copper of 15 per cent from January 1, 2027, rising to 30 per cent from January 1, 2028.
That possibility has reopened a profitable arbitrage between US and global prices. Comex copper has again moved to a premium over LME prices, encouraging traders to divert metal towards the US before any new duty structure is confirmed. The spread is smaller than the extreme levels seen during last year’s tariff rush, but it has widened enough to cover freight and financing costs for physical cargoes.
US-bound shipments have already accelerated. Refined copper imports into the United States more than doubled year on year to 533,000 tonnes in the first quarter, while exchange stocks in the country have expanded sharply. Comex-approved inventories have risen above 574,000 tonnes, while copper held in US locations and strategic stockpiles has crossed the 1 million-tonne mark, creating a buffer for manufacturers even as supply tightens elsewhere.
The shift is draining metal from the rest of the world. LME warehouse data showed large cancellation orders in New Orleans and other locations last month, a signal that owners intended to withdraw copper rather than leave it available to the exchange system. Cancelled warrants reached nearly 30 per cent of total LME copper stocks at one stage, adding pressure to a market already dealing with constrained mine output and high demand from electrification.
Trafigura, one of the world’s largest commodity traders, has been among the firms repositioning metal before the tariff ruling. Henry Van, the group’s head of industrial metals analysis, described the pattern as a repeat of last year’s scramble, saying all available tonnes were again being directed towards the US. Industry executives expect imports could return to 150,000 to 200,000 tonnes a month if the US premium remains attractive.
Goldman Sachs Group has raised its end-2026 LME copper forecast by more than 10 per cent to $13,735 a tonne, citing stronger US stockpiling and weaker-than-expected mine supply. Its analysts expect US imports to accelerate over the coming month as the arbitrage remains open, while their base case assumes Washington again delays tariffs on refined metal.
The tariff debate has exposed the structural limits of US copper supply. The country depends on imports for more than half of its refined copper needs, while domestic smelting capacity remains limited. Only two primary copper smelters operate in the US, making any push for import substitution difficult without years of investment in mining, refining and environmental permitting.
Producers in Chile, Canada, Peru and Mexico are watching the policy shift closely because they are among the key suppliers to the US market. Chile remains the world’s largest copper producer and a major source of refined metal for US buyers, while Canada and Mexico are deeply linked to North American manufacturing supply chains. A broad tariff on refined copper could increase costs for electrical equipment makers, construction suppliers, automakers and renewable energy developers.
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