Tariff concerns drive Copper to record highs - ING

Copper futures on Comex surged to a record high, ING's commodity analysts Warren Patterson and Ewa Manthey note.

Copper prices benefited from the front-running of tariffs

"That pushed the London Metal Exchange (LME) contract above the $10,000/t level, as prices benefited from the front-running of tariffs. Last month, President Trump instructed the US Commerce Department to investigate Copper import tariffs on national security grounds. Copper prices in New York are up by more than 28% this year, creating a disconnect between prices in the US and the global benchmark set on the LME."

"The arbitrage between Comex and LME reached all-time highs of more than $1,400/t yesterday. This creates incentives for traders to shift metal to the US to front-run any potential tariffs. There's a further upside risk for Copper prices in New York if tariffs are implemented. The investigation includes raw mined Copper, Copper concentrates, Copper alloys, scrap Copper and derivative Copper products."

"It may take months, allowing more metal to be shipped to the US before tariffs are imposed. However, there are more recent reports that suggest the tariffs could be introduced within weeks. The US Copper rush could leave the rest of the world tight on Copper if demand picks up more quickly than expected."