Copper Hits Record High at $14,533 per Ton on Tariff Concerns

Copper Flows to U.S. Ahead of Possible Tariffs
Rising AI and Electric Grid Demand, Combined With Mining Supply Disruptions

The price of copper has hit an all-time high on concerns about potential U.S. tariff hikes and fears of supply shortages.

According to Bloomberg on the 7th (local time), copper for three-month delivery on the London Metal Exchange (LME) rose as much as 0.8% intraday to $14,533 per ton. This surpassed the previous record high of $14,527.50, set in January. After partially paring those gains, copper was last trading at $14,518 per ton. Copper prices have risen by approximately 17% so far this year and are up 47% over the past year.

London Metal Exchange website.

A long-term imbalance between supply and demand is cited as the key background for copper’s sustained rally. With major copper mines around the world aging and limiting production growth, demand for copper is rapidly increasing, particularly from artificial intelligence (AI) data centers, renewable energy installations, and power grids.

The immediate catalyst for the recent surge in prices is the possibility of additional tariffs by U.S. President Donald Trump. There are ongoing market expectations that the United States may impose duties on imported refined copper products.

As a result, trading firms have shipped several hundred thousand tons of copper to the United States this year to engage in arbitrage, taking advantage of the price gap between the U.S. and other regions. With copper prices on the New York Mercantile Exchange (COMEX) staying elevated, more material has been flowing to the United States.

This has created a regional supply-demand imbalance, where global copper inventories remain relatively ample, but a significant portion is concentrated in the United States. Copper inventories at COMEX have surged to an all-time high of 695,624 tons, while inventories at the London Metal Exchange and the Shanghai Futures Exchange have declined.

Cristian Cifuentes, senior analyst at Chilean copper industry research institute Cesco, explained, "It is not so much that final demand has exceeded supply, but rather that tariffs have caused copper to be redistributed," and added, "It is not a global shortage in demand, but a supply shortage in certain regions."

In particular, with LME warehouse inventories plunging, competition for prompt physical supplies has grown fiercer. The LME spot price continues to trade above the three-month futures price—the so-called 'backwardation.' This is interpreted as a sign that immediately available copper supply in the market is insufficient. Bloomberg reported that copper prices rose even on the day when U.S. financial markets were closed for Labor Day and trading activity was subdued.

Concerns about supply disruptions are also driving prices higher. In Chile, the world’s largest copper producer, copper export revenues fell last month to the lowest level in over a year.

Michael Cuoco, head of metals at StoneX Financial, projected, "The combination of strong demand growth and supply disruptions will tighten supply-demand balances further and support higher prices."

This content was produced with the assistance of AI translation services.