Copper prices are approaching historic highs as U.S. tariff policies, global supply constraints, and China’s economic stimulus measures create a perfect storm in the commodities market. On March 24, copper futures on COMEX came within 2 cents of the all-time high of $5.20 per pound set last year, while maintaining a $1,500 premium over LME prices.
The price surge follows President Trump’s recent directive to investigate potential tariffs on copper imports, with discussions of a possible 25% duty sending shockwaves through the market. This has contributed to a 27% price increase year-to-date. In anticipation, traders are accelerating copper shipments to the U.S., with Mercuria reporting about 500,000 tons currently en route – significantly above the typical monthly import volume of 70,000 tons.
Supply fundamentals remain tight globally. Chile’s copper output fell 24% month-over-month in January to a nine-month low, with state-owned Codelco warning of ongoing production challenges due to maintenance activities. Meanwhile, China’s economic stimulus programs, including recently announced consumption-boosting measures, are expected to sustain strong demand for industrial metals. Positive economic indicators from China, including better-than-expected industrial production and retail sales growth, have further supported market optimism.
Market analysts project a 320,000-ton global copper deficit this year, with Mercuria’s metals trading head Kostas Bintas suggesting prices could reach $12,000-$13,000 per ton, noting unusual market conditions. As these demand and supply factors converge, the copper market appears poised for continued volatility and potential further price appreciation.
