Copper rises to record high

Copper futures in the US surged to a record high of $5.80 per pound, driven by a combination of geopolitical tensions and evolving global trade policies.

The upward momentum was amplified as the impact of US tariffs on copper became more pronounced amid a shift in sentiment away from deep pessimism in the manufacturing sector.

The US government confirmed that refined copper imports would be subject to the new tariff regime, following earlier signals aimed at bolstering the domestic copper industry and reducing reliance on foreign refined supply.

This policy move triggered a sharp divergence in global pricing, with the premium on US copper contracts over comparable futures on the London Metal Exchange (LME) soaring to an unprecedented 30%. The widening spread reflected not only falling international benchmarks but also the aggressive stockpiling by traders anticipating US import restrictions, which had begun after initial tariff threats on base metals surfaced in February.

If the tariffs are fully enacted, they could significantly disrupt domestic supply chains. The US currently imports nearly 50% of its copper consumption, with Chile standing as its largest supplier. The new measures could strain the nation’s limited refining and smelting infrastructure, as there are only two active smelters operating within the US, both of which have limited capacity.

In the absence of a rapid buildout in processing capabilities, the supply crunch could intensify, potentially leading to higher costs across industries dependent on copper, from construction to renewable energy.

Globally, sentiment in base metals markets received additional support from large-scale infrastructure investments by China, which continue to underpin demand for industrial commodities. Meanwhile, the recent easing of blanket tariffs on Japanese imports contributed to broader bullish momentum in the sector, adding another layer of complexity to the copper market’s near-term outlook.