Trump’s ‘Copper Tariffs’ June Countdown. US Copper Imports Surge, Will Copper Prices Hit New Highs?

TradingKey - On May 27, Bloomberg reported that copper trading activity has intensified as market expectations of potential copper tariffs under a Trump administration heat up, prompting traders to shift copper inventories from various locations to the U.S.

Currently, front-month copper futures on the Commodity Exchange (Comex) have been pushed to a premium of over $500 per ton relative to London Metal Exchange (LME) spot prices, marking the first time since last autumn that the spread has reached this level. This arbitrage window explains why copper traders are purchasing copper in the UK for shipment to the U.S.

The scale of recent copper inventory withdrawals has reached levels seldom seen in recent years. LME data shows that more than 30,000 tons of copper at its New Orleans warehouse were "canceled" (earmarked for delivery) on May 22.

A "canceled warrant" means the metal is no longer available for delivery and will soon be physically withdrawn from the LME warehouse system. The aforementioned withdrawal brought total cumulative canceled warrants at the warehouse to 45,675 tons; combined with approximately 22,000 tons of cancellations at other LME warehouses, total new canceled warrants for the day exceeded 50,000 tons—a volume rarely seen in more than a decade.

Copper Arbitrage Window Opens, Triggering Massive Shift in Global Inventories

Analysis indicates that U.S. copper import trade had previously stalled as narrowing arbitrage opportunities left traders with little incentive. However, several industry executives expect that as price spreads widen, U.S. copper imports could soon rebound to historical highs of 150,000 to 200,000 tons per month. Data from the World Bureau of Metal Statistics shows that U.S. refined copper imports doubled year-on-year in the first quarter of 2026, reaching 533,000 tons.

On one hand, the expansion of demand will rapidly drive up copper prices. LME copper futures briefly touched $13,746 per ton on Wednesday, representing a cumulative gain of approximately 43% over the past year; they even hit an all-time record of over $14,500 per ton at the end of January this year.

On the other hand, copper inventories in other markets are being squeezed. Henry Van, Head of Industrial Metals Analysis at Trafigura Group, stated, "We are in the same situation as last year, where all the copper is being shipped to the U.S." Nicholas Snowdon, Chief Metals Economist at Mercuria Energy Group, noted that copper markets outside the U.S. are facing shortages, and inventories in China have already begun to decline.

From a longer-term perspective, a substantial regional shift in copper inventories has occurred: since Trump ordered the initiation of a Section 232 investigation in February 2025, total copper inventories in COMEX-approved warehouses have surged from approximately 80,000-90,000 tons to 577,385 tons—an increase of over 550%, accounting for 44% of global exchange inventories. Meanwhile, total LME copper inventories have retreated from their peaks.

White House Modifies Section 232, Copper Trading Gains Momentum

Copper trading has returned to the spotlight, with the primary driver being mounting market expectations surrounding copper tariffs.

The White House issued a presidential proclamation on April 2, amending the scope of Section 232 and specifically tightening the tax assessment for copper derivatives. Under the revised terms, these derivatives will be taxed based on the "total customs valuation of the product," rather than the previous method of taxing only the "weight and value of the raw copper content." This regulatory change signals a potential hike in copper tariffs to the market.

Another noteworthy development is that the U.S. Department of Commerce is required to submit a copper market assessment report to Trump by June 30. Previously, the department had recommended a 15% tariff on refined copper. This report could be a critical juncture for finalizing tariff policies, potentially paving the way for import duties starting in January 2027.

Although nothing is set in stone, market expectations alone are sufficient to pivot trading strategies. Traders suggest that if Trump decides to impose tariffs on refined copper—potentially as high as 15%—it could further exacerbate supply tightness on the LME. This may open a window of opportunity in the second half of the year, giving traders a strong incentive to export copper to the U.S.

Will copper prices continue to rise in 2026?

In late January this year, copper prices surged above $14,500 per metric ton, hitting a record high. Traders noted that the current wave of U.S. imports could drive prices to new highs.

Currently, market bets on rising copper prices are even more aggressive than those for gold and silver, highlighting the feverish nature of copper trading. According to Commodity Futures Trading Commission (CFTC) data, for the week ending May 19, speculative net long positions in COMEX copper futures rose by 1,476 lots to 74,999, maintaining a high level not seen in 20 weeks. During the same period, COMEX gold speculative net longs decreased by 6,239 lots to 94,388, and silver net longs fell by 4,434 lots. Copper trading has become the market's primary focus.

However, Wall Street investment banks are taking a more cautious stance. A Goldman Sachs report pointed out that the recent breach of $11,000 per ton in copper prices was mainly driven by "expectations of future supply tightness," but current fundamentals have not yet tightened; the existing copper supply still meets global demand, making the rally unsustainable. Given that prices have decoupled from fundamental support, there is pressure for a short-term correction.

JPMorgan Chase projects that the average copper price in 2026 will be approximately $12,500 per metric ton, maintaining its full-year price target of over $13,000. The bank specifically emphasized the incremental impact of AI data center demand on copper consumption.