Copper Notches New All-Time High as Tariff Fears Intensify Supply Strain

Key Moments

Fresh Record on LME as Orders Spike in Asia

Copper prices surged to a new all-time high. This came after a sharp jump in orders for metal stored in LME warehouses in Asia. As a result, worries increased that potential US tariffs could trigger a severe global shortage.

On the LME, copper rallied as much as 2.6% to trade above $11,400 a ton. This move pushed the metal beyond the previous record set on Monday. The move followed exchange data indicating a notable rise in requests for copper from depots in Asia.

Mining shares climbed alongside the metal, with Chilean producer Antofagasta Plc advancing more than 5% to reach a record peak.

Tariff Uncertainty Drives Divergence Between US and LME Prices

The benchmark industrial metal has been climbing steadily in recent weeks. Traders and analysts have issued mounting warnings about global inventories. They say stocks could fall to extremely low levels, especially as large quantities of copper are being directed to the US ahead of potential tariffs.

The LME’s global benchmark copper contract has gained more than 30% so far this year. US copper futures have risen even more sharply. This reflects growing investor expectations that President Donald Trump will move ahead with duties on primary copper forms.

Trump initially outlined plans for such tariffs in February, a move that jolted the copper market and pushed US copper imports to record levels. In late July, he surprised the market by indicating that he would restrict the levies to value-added copper products, while also committing to review potential tariffs on commodity-grade copper from 2027.

Physical Market Disruptions and Rising Premiums

The evolving policy stance has significantly reshaped the physical copper trade. Shipments to US ports have accelerated again as American futures prices climb, encouraging suppliers to redirect material to that market.

Producers have responded by setting record-high premiums for deliveries to customers in Europe and Asia for next year. Those surcharges effectively compensate producers for the profit they could otherwise secure by selling into the US market instead.

Major trader Mercuria Energy Group Ltd. cautioned last week that these trade patterns could result in a substantial global shortage by the first quarter of next year. If that happens, copper could move even deeper into uncharted territory on the price front.

Mine Outages Tighten Market Despite Soft Demand

Beyond trade-related dynamics, supply has also been hit by operational disruptions. A series of mine outages across regions including Chile and Indonesia has constrained output this year, contributing to tighter market conditions even as overall demand has been described as tepid.

In China, smelters and miners are engaged in negotiations over supply arrangements for 2026. Those talks have been difficult, with miners currently enjoying stronger bargaining power.

Intraday Price Snapshot

As of 12:20 p.m. on the LME, copper was trading at $ a ton, leaving it up about 30% for the year. Aluminium posted gains, while zinc was little changed.