Copper Floods Into US As Traders Bet on Trump Tariffs

Spurred by US President Donald Trump’s proposed new tariffs on cathode imports, copper shipments from across the globe are flooding into the United States.

But analysts warn that should a so-called Taco scenario again unfold – as in, “Trump always chickens out” – copper prices in the US would likely fall in the short term.

IHS Markit shipping data showed that more than 200,000 tonnes of copper landed in the US last month – a 12‑year high for monthly inflows. 

This was said to have pushed the combined US-based inventories of the New York Commodity Exchange (Comex) and the London Metal Exchange (LME) above 740,000 tonnes.

Furthermore, an additional 110,860 tonnes were being held in storage at US ports as of Friday, according to the LME.

Bloomberg reported on Monday that stock levels at LME warehouses outside the United States had tumbled sharply this year. 

And the outflow was not limited to LME facilities, as analysts said the data showed Trump’s tariff threat was pulling copper out of the Chinese mainland.

Lingang, one of Shanghai’s major bonded-warehouse hubs, has seen this trend unfold since the start of the year.

“Business conditions have been tough for us this year,” said a manager overseeing a large bonded-warehouse operation in Lingang, who spoke on condition of anonymity. “Storing refined copper has long been one of our core business lines.

However, [the copper stockpile level] at our warehouse has already fallen to a multi-year low.” According to data from Shanghai-based Zijin Tianfeng Futures, copper inventories in Shanghai-area bonded warehouses fell to less than 30,000 tonnes this week, down from more than 300,000 tonnes at the start of the year.

“The copper cargoes are heading to the US out of our warehouse, and these are mainly of South African and other African origin,” the warehouse manager noted. “Their owners ramped up re-export volumes starting in May, since the US set a June 30 deadline for its commerce secretary to propose tariff-related recommendations.” Zhou Xiaoou, head of base metals research at Zijin Tianfeng Futures, said: “Shanghai-area bonded warehouses have long functioned as one of the world’s major physical copper hubs, so inventory levels typically see seasonal swings. This latest sharp, sustained drawdown is highly unusual, historically.” Producers and traders shipping copper stocks into the US are betting on cross-market arbitrage, according to analysts.

 The LME copper benchmark hovers around US$14,000 per tonne, while Comex futures traded at roughly US$6.60 per pound on Wednesday.

“Comex copper is currently trading at a premium to LME prices, with the spread hitting as much as US$600 per tonne late last month. The premium normally stays within US$100 per tonne,” Zhou said. “Our calculations show that the current arbitrage margin is large enough to cover shipping, insurance and warehousing costs.” The underlying logic for both the From June 30, Trump had a 90-day window to decide whether to impose tariffs on cathode imports.

According to Bloomberg, Trump directed the US’ commerce secretary, Howard Lutnick, to examine whether phased tariffs on refined-copper imports should be introduced, starting at 15 per cent in January 2027.

Analysts warned that different policy outcomes would drive divergent price moves in the near term.

“If the US rolls out those levies in 2027, Comex copper will continue to trade at a premium over the LME, staying at elevated yet volatile levels,” said Ji Xianfei, a senior analyst at Shanghai-based Guotai Junan Futures.

“The deciding factor will then shift to demand from the artificial intelligence (AI) industry and US domestic consumption.