Copper prices surge to all-time high amid US tariff expectations and supply tightening

Copper prices have surged to an all-time high on the London Metal Exchange (LME) amid anticipations of potential US tariffs and a tightening supply crunch, with analysts expecting prices to remain elevated in the short term.

Benchmark three-month copper futures closed at US$14,510 a tonne on Monday, after rising to a record high of US$14,533 a tonne earlier in the session, surpassing the previous record set in January.

The rally came with the market widely expecting the United States to expand tariffs to imports of refined copper starting next year, analysts at China Asset Management wrote in a note on Tuesday.

“This expectation has prompted American buyers to stockpile before restrictions take effect,” the analysts said, triggering what they described as an early “transpacific and transatlantic scramble for copper”.

This has driven a sharp divergence in global inventories, according to the note, with inventories on New York’s Commodity Exchange (Comex) rising significantly, while LME inventories have fallen to a near five-month low. Inventories in Shanghai Futures Exchange warehouses have also dropped to their lowest level since 2024.

The surge of shipments to the US is also driven by price differentials between New York and London contracts, with elevated premiums on Comex futures creating a lucrative arbitrage window.

“As long as the [US’] refined-copper tariff policy is not finalised, the Comex-LME price spread will continue to offer event-driven trading opportunities,” Cinda Futures analysts Lou Jiahao and Ma Ziyao wrote in a research note on Tuesday.