US tariff threat redirects copper flows as prices approach record highs

Warehouse withdrawals tighten the market

Three-month copper on the London Metal Exchange reached $14,343 per tonne on Tuesday, close to the record of $14,527.50. The advance followed orders to withdraw 65,400 tonnes of copper from LME warehouses over recent days. These warrant cancellations reduced the relief created by a rise in available inventories reported during the previous week on both the LME and the Shanghai Futures Exchange.

Analysts say the price strength primarily reflects a shortage of metal available for immediate delivery outside the United States, rather than a global deficit. Copper remains a critical input for electricity grids, electric vehicles and data centers serving artificial-intelligence applications. Limited prompt availability therefore matters directly to fabricators and industrial buyers even if total global supply appears sufficient on paper.

COMEX stocks reach a record

Higher US copper prices have encouraged traders to send metal into COMEX warehouses ahead of the possible introduction of tariffs on refined copper from 2027. COMEX inventories rose for 46 consecutive days to a record 675,185 tonnes. CRU had previously forecast a global copper surplus of 639,000 tonnes in 2026, but the relocation of metal has reduced accessible supply in other regions.

Robert Edwards, CRU's principal copper analyst, said the tariff threat had turned what should have been a surplus market this year into, at best, a balanced one if copper accumulated in the United States is treated as unavailable to the rest of the world. The United States imported almost 885,000 tonnes of refined copper cathode in the first half of 2026, about 3% more than a year earlier and more than twice the volume imported in the first six months of 2024. Full-year refined-copper imports reached a record 1.64 million tonnes in 2025.

Policy decision could move prices in either direction

Refined copper was ultimately exempted from US tariffs last year, initially triggering a sharp fall in prices. However, the US Department of Commerce was due to submit a copper-market report to the White House by June 30, allowing President Donald Trump to decide whether to impose a 15% tariff from January 1, 2027, rising to 30% from 2028. Macquarie strategist Alice Fox said the large quantity already stored on COMEX could take years to consume. Macquarie sees greater downside risks, although Fox said prices would rise sharply if the tariff proceeds.

Glencore chief executive Gary Nagle argues that uncertainty over US policy is exerting more influence than the tariff itself. In his view, a final decision—whether the rate is zero, 15% or 30%—could lower prices by giving the market clarity. He expects the US stockpile, on which relevant duties have already been paid, to be consumed domestically over time rather than re-exported because of the associated costs. That could leave other regions with constrained supply. Amelia Fu, head of commodity market strategy at Bank of China International, said strong Chinese domestic demand may limit the ability of the world's largest copper-smelting country to offset shortages elsewhere. She also cited low inventories, mine disruptions and the shutdown of the Gresik smelter in Indonesia as sources of pressure, and said copper could set fresh records in the coming weeks or months.