Copper traders are once again scouring the globe for metal to ship to the United States, as renewed speculation over import tariffs has reignited a trade that once upended the $300 billion annual market. Over the past year, intermittent threats of import tariffs from former U.S. President Donald Trump have dominated the copper market, frequently pushing prices on the New York Commodity Exchange (Comex) above the global benchmark and creating significant profit opportunities for traders shipping metal to the U.S. In recent months, U.S. copper imports slowed as weaker Comex prices rendered shipments unprofitable. However, according to several industry executives, the widening spread between Comex and the London Metal Exchange (LME) over the past few weeks means traders are now directing every available ton of copper toward the U.S. Multiple executives indicate that import volumes could rebound to the historically high range of 150,000 to 200,000 tons per month. Henry Fan, Head of Industrial Metals Analysis at Trafigura Group, stated, "This feels a bit like déjà vu. We are in the same situation as last year, with all metal heading to the U.S." "It is entirely conceivable that our import volumes could return to 200,000 tons per month in the near future." The price of the near-month Comex contract has surged to more than $500 per ton above the LME spot price for the first time since last autumn. This exceptional performance is driven by renewed investor enthusiasm for copper and speculation that a potential Trump administration could impose import tariffs on refined metal to protect U.S. industry. The Commerce Secretary faces a June 30 deadline to submit an updated report on the U.S. copper market, which could pave the way for tariffs starting as early as January 2027. According to informed sources, Trafigura Group began withdrawing hundreds of millions of dollars worth of copper from LME warehouses last week, partly to capture the premium on Comex. This represents the largest cancellation of warrants (withdrawal orders) seen on the LME since 2013. Traders note that this renewed rush to ship copper to the U.S., following copper's climb to a record high above $14,500 per ton in late January, is injecting a new catalyst into a series of bullish factors that could drive prices to new highs. While the tariff-driven copper trade is reviving, shipping metal into the U.S. is becoming more challenging. Disruptions related to conflicts in the Middle East affecting global freight markets, coupled with congestion in the Panama Canal, have significantly lengthened the time required to transport copper from South America to major U.S. ports. Gerardo Tarricone, Managing Director at Arion Investment Management Ltd., remarked that merely the threat of future tariffs is enough to sustain the inflow. "We will see capital and goods flowing into the U.S., which will make the copper story even more interesting." Copper prices are already at historic highs. On Wednesday, LME copper reached $13,746 per ton, marking an approximate 43% increase over the past year. Enthusiasm surrounding artificial intelligence has helped boost investor positioning on Comex to its most bullish level since December 2020. Meanwhile, Chinese buyers, who exited the market earlier this year as prices rose, have returned since the Lunar New Year holiday. Traders suggest that if Trump decides to impose tariffs on refined copper, the impact could tighten supply on the LME. This effect would be amplified if the U.S. moves forward with the Commerce Department's proposal from last year to implement a 15% tariff starting in January 2027. This could open a window in the second half of this year, providing traders with a powerful incentive to ship copper to the U.S. Nicholas Snowdon, Chief Metals Economist at Mercuria Energy Group, stated that the copper market outside the U.S. is in a supply deficit, with inventories in China already beginning to decline. "The focus of this deficit should shift to the LME. It's only a matter of time," he said. "If tariffs are confirmed to start from the beginning of next year, LME inventory drawdowns in the third and fourth quarters could be very strong."
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