The copper market experienced a significant surge on February 10, 2025, following U.S. President Donald Trump's announcement of new tariffs on industrial metals. The premium for U.S. copper futures soared to a record high, reflecting traders' reactions to the evolving trade policies.
On Monday, the price of copper in the United States skyrocketed as traders reacted to President Trump's plans to impose tariffs on various industrial metals. The premium of U.S. Comex copper futures over those traded on the London Metal Exchange (LME) surged dramatically, indicating heightened market volatility and speculation.
The premium rose from $558 on Friday to an astonishing $920 per metric ton by 1820 GMT, marking a significant shift in market dynamics. This surge is attributed to the anticipated impact of the new tariffs, which are part of Trump's broader trade policy shake-up.
The announcement of new tariffs is expected to have far-reaching implications for the copper market:
Since Trump took office, the Comex copper has consistently traded at a premium to the LME, with fluctuations ranging from $250 to $500. The recent spike in premium is unprecedented, as traders scramble to adjust to the latest developments in U.S. trade policy.
The previous peak in the premium occurred in late May 2024, when it reached $655 per ton due to a short squeeze that forced parties to buy back their short positions at a loss. The current situation, however, is driven by proactive tariff announcements rather than reactive market conditions.
Benchmark Minerals Intelligence noted that the price arbitrage between the COMEX and the LME has ballooned to an all-time high, as traders continue to price in the implications of the copper import tariffs. The premium now implies that the market is anticipating a 10.5% tariff on copper, a significant factor that could influence future trading strategies.
The surge in copper prices following the tariff announcements underscores the sensitivity of the commodities market to trade policy changes. As the situation develops, market participants will be closely monitoring further announcements from the Trump administration and their potential impact on copper pricing and availability. The current landscape suggests a period of heightened volatility and uncertainty in the copper market, with implications for both domestic and international trade.
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