CME copper reaches two-month highs; focus on US tariffs
The COMEX copper prices rose to two-month-highs on Thursday, as the market tried to discount the possibility of hefty tariffs being imposed on U.S. imported goods after Donald Trump becomes president-elect in the United States later this month.
The industrial metal prices on COMEX (part of CME Group) hit $4.285, or $9.446.82 per metric ton. This is the highest price since November 11, when Trump won the U.S. elections and floated import duties. The contract last rose 1.0% to $4.2795.
The London Metal Exchange's (LME) copper contract has a premium of around $400 per ton, up from near zero in 2025.
Copper prices on both exchanges initially fell due to concerns about U.S. tariffs on imports, notably the threat of a 60 percent levy on Chinese exports, as well as the potential for trade wars.
Metal traders expect LME prices to be under pressure in the next few days, as the dollar has dropped. They also expect the CME to widen its gap with the LME, due to the reduction of short positions, or bets made on lower prices on the U.S. Exchange.
In a recent note, analysts at TD Securities stated that "the threat of universal tariffs has caused havoc on the metals market."
In order to be prepared for possible tariffs, traders are shipping copper to the United States. A portion of this copper was deposited at warehouses registered by the CME.
CME Warehouses: Total Copper Stocks - Warranted and Unwarranted
David Wilson, BNP Paribas' analyst, said that he expects copper inventories to continue building in CME sheds before the implementation of tariffs. This is because CME copper contracts are duty-paid and customs-cleared.
We expect that the tariffs will reflect in the relative price of CME versus LME Copper."
Analysts say that the U.S. imports aluminium, nickel, and zinc, but not copper.
Wilson stated that "significant refined (copper production) from Freeport-McMoRan, Rio Tinto Kennecott and others accounts for more than 55% of U.S. copper needs."
Copper sourced from Chile is the most common source of imports. It accounted for 66%, or 511,000 tonnes, of the refined copper imported to the U.S. in 2013. Mexico and Canada together accounted 19% or 142,000 tonnes of U.S. imports of copper last year."
(source: Reuters)
