More copper flowing to the US

The collective scramble to move as much physical copper as possible to the US before the imposition of import tariffs is creating shortages in the rest of the world.

- Andy Home

London Metal Exchange (LME) stocks have fallen to nearly two-year lows with time-spreads flaring into backwardation as inventory drains away.

This tariff trade will continue until US President Donald Trump's administration makes up its mind whether to add copper to the lengthening list of metals subject to penal import duties.

The Section 232 investigation launched by the administration in February comes with a 270-day deadline. Administration officials have dropped heavy hints it would be completed in accelerated "Trump time", but the market is still waiting.

The CME customs-cleared US copper contract continues to command a hefty premium over the London market. The arbitrage has been a volatile trade but at a current US$1,000 (32,420 baht)-per metric tonne basis three-month delivery, traders appear to be pricing in a potential 10% tariff.

More importantly, the transatlantic price gap more than covers the costs of shipping, suggesting no immediate let-up in the physical copper tariff trade.

SEEKING CHILEAN COPPER

US imports of refined copper jumped to more than 200,000T in April, the highest monthly arrival rate this decade.

Imports totalled 455,000T in the first four months of the year, more than double the tonnage imported over the same period of 2024.