Copper prices have hit record highs as U.S. President Donald Trump signals that a 25% tariff on the industrial metal's imports could be coming within several weeks - drastically bringing forward a 270-day deadline for the decision, according to Bloomberg.
The planned levies are part of a broader effort to boost domestic production of critical minerals, following emergency measures introduced last week to fast-track the development of new mining projects.
Hot copper
A timeline for the 25% levy increase on the red metal being potentially being brought forward has put a heater underneath prices - which are currently trading at a record US$11,800/t - and could spike higher in the near term.
Several trading houses had just forecast copper to hit at least US$12,000 this year.
The London Metals Exchange says stockpiles in warehouses are at their highest levels since 2019 - ready to ship as the tariff threats looms and is currently the most heavily traded future in the U.S.
The COMEX rallied to a new high of US$5.374 per pound (lb) compared to the previous day’s settlement price of US$5.2105.
Copper, intrinsic to the world’s electrification and clean energy goals, is expected to sustain prolonged high demand as upgrades to essential infrastructure will mean a drastic increase in consumption over the next couple of decades.
Find out more: Mission Critical: Copper bulls to lead metals recovery
Pedal to the red metal
Trading interest is coming from other sectors too. For instance, energy giant Mercuria’s recent foray into industrial metals trading is seen as a sign of long-term belief in copper's future use and expected rise in volume
The company's move challenges the smaller metals traders, who have struggled to stay profitable amid high energy prices and supply chain disruptions.
Mercuria says it expects to move about 750,000t of copper cathode and 1Mt of copper concentrate.
While the market remains dominated by swiss trader Glencore and Trafigura, Mercuria’s push into metals signals the intensifying competition in the sector and copper’s underlying demand fundamentals into the future.
