Copper prices have surged to new record highs on the London Metal Exchange (LME), with three-month futures approaching $14,800 per tonne, according to ING’s commodities team. This rally is primarily attributed to market positioning ahead of potential US tariffs on refined copper imports, which has led to increased demand for copper in the US and a tightening of supply in other markets [1].
The proposed US tariffs include a 15% duty starting in January 2027, rising to 30% in 2028. As traders anticipate these measures, large volumes of copper have been drawn into the US, resulting in COMEX inventories reaching record levels. This shift has reduced the availability of copper outside the US, tightening the London market and putting pressure on short positions [1].
ING analysts caution that the copper rally is increasingly driven by policy expectations rather than underlying demand, which remains subdued. They warn that if the proposed tariffs are delayed, softened, or rejected, copper prices could correct sharply, especially as the current demand environment does not support sustained high prices. The market is closely watching for a decision from President Trump regarding the tariffs, and any exemption or delay could quickly unwind the current trade dynamics and ease supply tightness elsewhere [1].
Overall, ING expects copper prices to remain elevated as long as tariff uncertainty persists, but highlights the risk of a significant price correction if policy expectations are not met [1].
CONCLUSION
Copper’s record rally is being driven by expectations of US tariffs, which have tightened global supply and pressured short positions. However, ING warns that the rally is vulnerable to a sharp correction if tariff plans are delayed or abandoned, given subdued demand. Market participants are advised to closely monitor policy developments for further direction.