Key Moments
- The Commerce Secretary is due to submit a refined copper tariff recommendation to President Donald Trump by 30 June, with markets already adjusting ahead of the decision.
- The COMEX-LME copper spread has widened to around $400/t, reflecting tariffs-related risk premia on US-delivered refined copper and a geographic shift in inventories.
- A projected global copper deficit of around 35kt in 2026 keeps the underlying market tight, with tariffs set to influence where that tightness shows up rather than the overall balance.
Tariff Review Enters Final Stretch
The United States is approaching a key decision on import tariffs for refined copper, with the Commerce Secretary expected to recommend a course of action to President Donald Trump by 30 June. Market participants have already begun positioning around potential outcomes, evident in a widening price differential between US and international copper benchmarks.
The spread between COMEX and LME copper has expanded to roughly $400/t, signaling that traders are embedding a meaningful probability of higher trade barriers on refined copper entering the US market.
Copper Prices Hold Firm Despite Macro Headwinds
LME copper is trading close to record levels, with prices up about 10% year-to-date and proving resilient despite a challenging macroeconomic environment. Robust US labor data has reinforced expectations that the Federal Reserve will maintain a restrictive policy stance for longer, while renewed tensions involving Iran have undermined broader risk appetite.
Tight physical supply, tariff-driven stockpiling in the US, and copper demand linked to AI-related power needs are helping copper outperform much of the wider commodities complex, with the looming tariff decision adding another layer of support.
Structure of the Potential Tariff Regime
When President Trump introduced a 50% tariff on copper in July 2025, refined copper was explicitly excluded. That carve-out is now under review. The Commerce Secretary has until 30 June to advise on whether, and in what form, tariffs should be extended to refined copper imports.
The initial proposal from the Commerce Department envisioned a 15% tariff on refined copper imports beginning in January 2027, rising to 30% in 2028.
Earlier this month, Trump signed a proclamation reshaping the broader metals tariff framework. The move preserved the 50% tariff on semi-finished copper products, lowered the domestic content requirement for preferential treatment from 95% to 85%, and expanded coverage to additional semi-fabricated products such as electrical conductors and cables. The revised structure took effect on 8 June. These adjustments are widely interpreted as laying the groundwork for a refined copper decision, while making it easier for importers to qualify for preferential treatment linked to US-produced material.
Market Positioning and Inventory Shifts
Since February, US copper imports have surged in advance of the tariff deadline, drawing extra tonnage into the domestic market and constraining availability in other regions.
COMEX-registered inventories have climbed to record levels. This accumulation has come directly at the cost of LME and SHFE stocks, which have fallen sharply over the same period.
The inventory build is being driven by arbitrage rather than underlying consumption growth. It reflects a relocation of available copper, with a sizeable share of cathode now effectively “locked” into the US market on economic grounds. Some of that metal could be released if expectations around tariffs diminish, but ongoing trade policy uncertainty is encouraging holders to treat these inventories as strategic rather than readily tradable.
COMEX-LME Spread Dynamics
The COMEX-LME spread began to widen again from early 2026 as the 30 June deadline came into sharper focus. It turned positive in late March and has continued to climb, reaching around $400/t in early June.
While elevated, the current spread is well below the extreme of roughly $2,937/t seen in late July 2025, when markets briefly anticipated a 50% tariff on all copper. Current pricing suggests investors view a phased 15% tariff as a more limited scenario compared with the earlier, broader fear.
| Indicator | Recent Level / Change | Context |
|---|---|---|
| LME copper price | Up around 10% year-to-date | Near record highs despite macro headwinds |
| COMEX-LME spread | Around $400/t (early June) | Re-widened as tariff deadline approaches |
| Peak historical spread | About $2,937/t (late July 2025) | When a 50% tariff on all copper was briefly feared |
| US copper imports | Spiked since February | Pre-tariff stockpiling into the US |
| COMEX inventories | Record highs | Offset by sharp declines in LME and SHFE stocks |
Potential Market Reactions to the Tariff Decision
A confirmed 15% phased tariff beginning 1 January 2027 would likely widen the COMEX premium over LME copper. In practice, both benchmarks would be expected to move higher. COMEX prices would be supported by stronger US import demand, while LME prices would gain as redirected flows reduce supply availability outside the US.
In this scenario, the impact would be globally supportive for copper, although price gains would likely be more pronounced on COMEX. If the step-up to 30% in 2028 is accelerated or firmly signaled as a near-term objective, the premium could widen further.
Downside Scenarios for the Spread
A postponement of the decision represents the clearest short-term downside risk for the COMEX-LME spread. Even so, the effect would likely be milder than that of a complete rejection. A delay would compress the arbitrage and slow the pace of inflows into COMEX, but the copper already accumulated in the US is unlikely to exit quickly. As long as tariff risks linger, a substantial portion of those inventories is expected to remain effectively confined to the US.
Under this outcome, the spread would narrow but would probably stabilize at a structurally wider level than before 2025, rather than reverting to parity.
An outright rejection of tariffs is the most bearish case. US import demand would be expected to fall sharply, removing the incentive for further stockpiling. Both COMEX and LME benchmarks would likely come under pressure in that scenario. Metal currently “locked” in the US could then potentially rejoin global trade flows or at least cease to be held as sequestered inventory.
Persistent Supply Tightness Shapes Medium-Term Outlook
The global copper market is projected to move into a deficit of around 35kt in 2026, reflecting mine-related losses in Indonesia, Chile, the DRC and Zambia, along with disruptions to Middle Eastern sulphur supply and ongoing end-use demand from electrification and grid infrastructure.
The tariff decision does not alter this underlying balance, but it will affect how quickly the deficit shows up in visible exchange inventories and how the COMEX-LME price relationship evolves.
LME copper is expected to remain broadly supported at current levels through 2Q, then ease modestly into 3Q and 4Q as the initial tariff stockpiling impulse wanes and macro headwinds persist. The tariff announcement itself presents upside risk to this near-term trajectory. A front-loaded 30% tariff would add further upside potential, while a delay or rejection of tariffs is the most significant downside risk for the second half of the year.
Key Indicators to Monitor
In the weeks ahead, two markers stand out as critical for investors and traders:
- The 30 June deadline for the Commerce Secretary’s recommendation and any subsequent decision on refined copper tariffs.
- The behavior of the COMEX-LME spread as a real-time barometer of tariff expectations, inventory dynamics, and regional tightness.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
