Copper Prices Hit Record High in US Amid Potential Trump Tariffs

Copper prices have reached an unprecedented high in the United States, driven by speculation that President Donald Trump may impose import tariffs on the metal. The May delivery contract on the COMEX reached $5.2255 per lb., breaking past records. This significant rise is primarily a result of Trump's directive for the US Commerce Department to investigate copper tariffs on national security grounds, driving a wedge between US prices and those of the London Metal Exchange (LME). The prospect of new tariffs has prompted traders to redirect approximately 500,000 tonnes of copper to the US, while authorities and experts predict a 25% levy may be enforced by year-end. This shift in copper flow has widened the price gap between New York and London, with analysts like Kostas Bintas from Mercuria expecting LME prices to climb above $12,000 per tonne due to tight global supply. In China, copper contract prices reflect strong demand, with a modest backwardation seen in Shanghai, highlighting robust consumption rather than critical shortages. Increased Chinese exports and maintenance at smelters have played a critical role in the evolving dynamics, as reflected in a 119% surge in China’s refined copper exports during early 2024. This evolving situation illustrates the complex interplay of national policy, global trade, and market speculation. President Trump's tariff inquiry signals a potential shift towards protectionism, which could further destabilize global copper markets. The high stakes involved in such policy decisions underscore the need for careful consideration of economic and geopolitical repercussions. Analyzed and reviewed by artificial intelligence, this article explores not just the immediate financial implications but also the broader impact on international trade relations.