Key Moments
- Copper on the London Metal Exchange has reached record highs above USD 14,000 per ton, supported by structural demand from the energy transition and data centers.
- The US Department of Commerce is expected to decide by the end of June on whether to expand existing metal tariffs to include refined copper from 2027.
- COMEX copper inventories have been rising again since mid-April, coinciding with concerns over future US tariffs and tightening supply outside the US.
Tariff Risks Add Fuel to Copper Price Upswing
Commerzbank Commodity Analyst Barbara Lambrecht reports that copper has climbed to unprecedented levels on the London Metal Exchange, driven by ongoing structural demand linked to the energy transition and the build-out of data centers. Against this backdrop, the prospect of additional US tariffs on refined copper is emerging as a significant catalyst for the latest leg of the rally.
According to Lambrecht, sentiment across base metals has stayed firm even as energy prices have moved sharply higher. She notes that the London Metal Exchange base metals index set a fresh record high this week, with copper exceeding USD 14,000 per ton.
Details of the Potential US Tariff Expansion
Concerns about limited copper ore availability are being compounded by fears that the US could broaden its existing tariffs on metal imports to cover refined copper. Commerzbank highlights that the US Department of Commerce is expected to decide by the end of June on whether to implement such an extension.
The original tariff proposal outlined a phased approach. As described, it envisaged a 15% tariff on refined copper imports starting January 1, 2027, with a further increase to 30% one year after that initial implementation date.
| Measure | Proposed Start | Tariff Rate |
|---|---|---|
| Initial refined copper tariff | January 1, 2027 | 15% |
| Subsequent increase | One year after January 1, 2027 | 30% |
Stockpiling Behavior and Inventory Shifts
Commerzbank notes that import patterns have already reflected anticipation of potential tariffs. The bank points out that copper imports nearly doubled last year, which it attributes to stockpiling ahead of possible tariff implementation. This behavior could intensify again as the US Department of Commerce approaches its decision deadline.
Lambrecht adds that inventory trends are reinforcing this picture of pre-emptive positioning. She observes that COMEX copper stock levels have been rising since mid-April. This accumulation of inventories within the US is contributing to tighter availability for markets outside the country.
Focus on Chinese Production Data
Looking ahead, Commerzbank flags upcoming Chinese production figures as a key data point for the copper market. The bank emphasizes that these numbers, which are due next week, will be monitored closely by market participants given their potential implications for global supply and price dynamics.
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