Copper: Tariff risk fuels rally – Commerzbank

Finance

Copper: Tariff risk fuels rally – Commerzbank

Commerzbanks Commodity Analyst Barbara Lambrecht highlights that Copper has surged to record levels on the London Metal Exchange, supported by structural demand from the energy transition and data centers. At the same time, the US is considering extending tariffs to refined Copper from 2027, encouraging pre-emptive stockpiling and tightening supply outside the US. Chinese production data due next week will be closely watched.

Record prices and looming US tariffs

“In the base metals markets, sentiment remains positive despite another significant rise in energy prices: The London Metal Exchange index even hit a new record high this week. A ton of copper cost more than USD 14,000.”

“In addition to concerns about a shortage of copper ore, fears of an expansion of US tariffs on metal imports are likely also playing a role in the current copper price rally. The US Department of Commerce is expected to decide by the end of June whether to extend the existing tariffs to refined copper.”

“The original proposal called for the introduction of a 15% tariff effective January 1, 2027. One year later, this was to be increased to 30%.”

“In contrast, imports nearly doubled last year, likely due to stockpiling ahead of the potential introduction of tariffs. This trend could intensify again as the US Department of Commerces decision draws nearer.”

“And indeed, since mid-April, inventories on the COMEX have already begun rising again, which is tightening supply outside the US.”