Copper: Tariff risks keep prices vulnerable – ING

ING’s Commodities Strategist Ewa Manthey notes that Copper has dropped sharply after a Reuters report suggested a US decision on refined Copper tariffs is still pending, highlighting how a tariff premium has driven prices beyond fundamentals. She explains how US-focused arbitrage, shifting inventories and a still‑surplus refined market contrast with tight nearby supply, leaving Copper’s longer-term outlook positive but near-term prices sensitive to tariff headlines.

Tariff premium, stocks and surplus balance

"Copper fell more than 3% on Thursday after hitting a record $14,875/t on the London Metal Exchange earlier in the session."

"Until now, the market had largely assumed that tariffs would go ahead. The latest news has challenged that view and taken some of the tariff premium out of copper prices."

"If the tariff premium between New York and London narrows, shipping more metal to the US will become less attractive. Some stocks could eventually return to international markets."

"However, the refined market is not yet facing an outright shortage. Refined production rose 2.4% in the first half, leaving a preliminary surplus of around 131,000 tonnes, according to ICSG."

"Either way, the arbitrage will eventually close. If tariffs are ruled out, the US premium should narrow and some metal could return to international markets. If they go ahead, imports could rise again before the duties take effect, but should slow afterwards."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)