Copper price continues to surge – Commerzbank

Copper prices jumped to a new record of $11,540 per ton as fears mount over potential US import tariffs extending to refined Copper. Market concerns over supply shortages and surging delivery requests threaten further depletion of LME inventories, keeping upward pressure on prices, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.

US import tariffs on Copper raise supply concerns

"At the beginning of the week, the Copper price made another significant upward leap, reaching a new record high of $11,540 per ton. This time, fears of a short-term supply shortage due to looming new US import tariffs on Copper were the driving force. Over the summer, the US administration surprised the market by initially exempting refined Copper from the 50% tariffs, applying them only to semi-finished Copper products and Copper derivatives."

"Consequently, the Copper price traded on the Comex collapsed, and LME warehouse stocks recovered starting mid-year, as large amounts of metal had been shipped to the US in anticipation of the tariffs. Now, however, there are growing concerns that the tariffs could be extended after all, potentially triggering another drain on LME inventory to Comex. These fears were recently heightened by a surge in requests for metal deliveries."

"Indeed, the US Secretary of Commerce originally proposed that tariffs on refined Copper should also be introduced gradually — but only starting in 2027. Is it possible that the US administration might expedite this process? Certainly. However, the initial aim may have been to allow the domestic Copper industry sufficient time to expand production capacity in order to meet domestic demand. According to USGS data, the current domestic supply coverage rate is only about 50%. Nevertheless, as long as these fears persist and lead to further inventory depletion at the LME, the risk of renewed Copper price surges remains high."