Copper Prices Surpass US$10,000 as US Tariff Fears Shake Global Markets
Copper prices surged past US$10,000 per metric ton on Thursday (March 20), hitting a five month high as traders scrambled to secure supply ahead of potential US tariffs on the base metal.
London Metal Exchange (LME) copper futures climbed sharply in early trading, reflecting a combination of supply constraints, rising demand and uncertainty surrounding trade policy.
US President Donald Trump has ordered a probe into the national security implications of copper imports, raising concerns that a 25 percent tariff could be imposed, similar to levies already placed on aluminum and steel.
The potential for such tariffs has triggered a wave of preemptive buying, particularly in the US, where traders are paying record premiums to acquire copper before any duties take effect. The spread between New York Comex futures and LME prices widened to more than US$1,254 this week, exceeding February’s high of US$1,149.
Tariff threat complicating copper trade
If the US imposes a 25 percent tariff on copper imports, analysts say the price gap between Comex and LME copper could widen even further, potentially surpassing US$2,000.
StoneX analyst Natalie Scott-Gray told the Financial Times that this would further distort global copper trade, creating strong incentives for suppliers to shift even more metal to the US market.
Wei Lai, deputy trading head at Zijin Mining Investment Shanghai, told Bloomberg that “a round of cross-regional repricing triggered by potential US tariffs” is unfolding. The rush to divert supply to the US is leaving other regions short of the metal, while also boosting investor confidence in copper as a lucrative commodity.
Beyond tariffs, the copper market is facing broader supply-side challenges. Processing fees for copper smelters have reached historic lows, raising concerns about the long-term viability of some refining operations. An oversupply of smelting capacity — particularly in China — has made it difficult for copper smelters to maintain profitability.
Commodities trading giant Glencore (LSE:GLEN,OTC Pink:GLCNF) recently announced it would halt operations at its Philippine copper smelter, citing “increasingly challenging market conditions” as processing fees collapsed.
More smelters could shut down if the situation persists, further tightening copper supply and boosting prices.
While trade policy is a key factor driving copper’s price surge, broader macroeconomic trends are also playing a role. Expectations of rising demand from Germany’s major infrastructure and military spending initiatives, as well as stimulus measures in China, are supporting bullish sentiment for the metal. Furthermore, some investors are diversifying away from US tech stocks, shifting funds into gold and industrial metals as a hedge against economic volatility.
During the recent Prospectors & Developers Association of Canada convention, Adrian Day, president of Adrian Day Asset…
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