Analysis indicates that potential US tariffs have pushed copper prices close to historical highs, currently trading above $14,000 per ton, but if tariff expectations are not met, the rally may face a risk of correction.
Copper prices recently surged above $14,000 per ton, nearing historical highs, primarily driven by market expectations of potential new import tariffs in the United States. This anticipation has led to a massive influx of copper into the U.S., tightening global supply and pushing up spot market indicators. London Metal Exchange (LME) inventories have fallen to a five-month low, while COMEX inventories have risen to record levels. U.S. copper imports in July exceeded 200,000 tons, marking a monthly high for at least 12 years. Analysis suggests that while tariff expectations are the main factor behind the recent surge, fundamental factors such as limited growth in mine supply, a shortage of refined copper (with a projected global deficit of approximately 35,000 tons in 2026), and demand from electrification projects also provide structural support. However, if the final tariff measures are delayed, have a smaller scope than anticipated, or do not include refined copper, some of the tariff-driven premium could quickly unwind, leading to a short-term correction.
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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