Copper imports into the United States surged to a 12-year high in July as traders anticipated new tariffs proposed by the administration of President Donald Trump. According to shipping data from IHS Markit, over 200,000 tonnes of copper arrived in the US last month, contributing to combined inventories on the New York Commodity Exchange (Comex) and the London Metal Exchange (LME) surpassing 740,000 tonnes. Additionally, the London Metal Exchange reported that ports in the US held approximately 110,860 tonnes in storage as of last Friday.
The influx is part of a broader trend involving a significant drawdown of copper inventories in LME warehouses outside the US, particularly in mainland China. Analysts noted that stock levels in Shanghai-area bonded warehouses, a key global copper hub, have dropped precipitously this year. According to Zijin Tianfeng Futures, copper inventories in these warehouses decreased from over 300,000 tonnes at the start of 2023 to less than 30,000 tonnes recently. A warehouse manager in Lingang, a major Shanghai bonded-warehouse district, confirmed that refined copper stockpiles had fallen to multi-year lows, attributing the decline to shipments heading primarily to the US. The manager added that many of these copper shipments originated from South African and other African sources, with re-export volumes increasing since May linked to the looming June 30 deadline for potential tariff measures.
The anticipated tariffs stem from a directive by President Trump to the US Commerce Secretary, Howard Lutnick, to evaluate phased tariff options on refined copper imports. These could begin at 15 percent starting in January 2027. Analysts noted the ongoing 90-day review period granted after June 30 offers flexibility, which has led some market participants to speculate a possible reversal or delay—referred to in some quarters as a "Taco scenario," where proposed tariffs are ultimately not implemented.
Market participants are currently taking advantage of a notable arbitrage opportunity between Comex and LME copper prices. While LME copper prices hover near $14,000 per tonne, Comex futures stand at about $6.60 per pound, equating to a roughly $600 per tonne premium on Comex copper—well beyond the typical spread of about $100 per tonne. According to Zhou Xiaoou, head of base metals research at Zijin Tianfeng Futures, this pricing gap is sufficient to cover transportation, insurance, and storage expenses, incentivizing traders to move copper from international warehouses to US markets.
Looking forward, analysts have differing views on price trajectories based on tariff outcomes. Ji Xianfei, a senior analyst at Guotai Junan Futures in Shanghai, suggested that if the US proceeds with the tariff plan in 2027, Comex copper prices could maintain elevated and volatile premiums relative to LME prices. In that scenario, demand dynamics, particularly from sectors like artificial intelligence and domestic US consumption, would play a critical role in shaping prices. Conversely, if tariffs are shelved, short-term copper prices in the US might decline as the arbitrage incentive wanes.