Copper's Tariff Trade Returns
GFN – NEW YORK: Bloomberg News reported that copper's tariff-arbitrage trade has reactivated, with front-month Comex contracts trading more than $500 per ton above LME cash prices for the first time since late 2025 as traders again redirect global supply toward the United States.
The dislocation revives a pattern last observed during the Trump administration's 2025 copper tariff campaign, when stockpiles drained from London to North America in anticipation of import duties. Comex copper settled at $5.6358 per pound, up 2.72% on the session, while the London price reached $13,746 per ton on Wednesday, a 43% advance over the past year (via Mining.com).
The Commerce Department is scheduled to deliver an updated copper market review by June 30, with a recommended fifteen percent import tariff set to take effect in January 2027. Trafigura Group has withdrawn hundreds of millions of dollars of copper from London Metal Exchange warehouses in recent sessions, the largest such pull since 2013.
“There's a bit of déjà vu,” said Henry Van of Trafigura Group. “We're in the same situation as last year, where all tons are directed to the US.”
If sustained, the trade could push monthly United States imports to between 150,000 and 200,000 tons, dwarfing typical flows and reinforcing a continuing redirection of metal toward Comex deliverable stocks. Mercuria Energy Group analysts said tariff confirmation would trigger a strong drawdown of LME inventories in the third and fourth quarters. The reactivation aligns with the broader pattern of metals markets repricing physical premia ahead of United States trade actions, and reflects the continued centrality of Washington policy decisions in shaping global base metals positioning.