A wave of copper imports has overwhelmed the U.S. market, collapsing the premium for tariff-hedged metal and draining global exchange stocks, as traders scramble to front-run President Trump’s pending decision on whether to impose 25% import duties.
Key Market Shifts:
- CME vs. LME Arbitrage Collapse:
- The U.S. premium over LME copper prices plunged from 1,600/tonto1,600/tonto600/ton in weeks as imports surged.
- CME inventories hit an 8-year high (152,919 tons), while LME stocks dropped to a 1-year low (179,375 tons).
- Import Surge: U.S. refined copper imports tripled to 40,000 tons/week since March, with metal funneled into New Orleans warehouses.
- Global Ripple Effects:
- China’s SHFE stocks fell 60% since February as metal diverted to the U.S.
- Scrap Trade Frozen: U.S.-China copper scrap flows halted amid tariff uncertainty.
Why It’s Happening:
- Traders are pre-positioning metal to profit if Trump mirrors steel/aluminum tariffs (25%).
- Section 232 Investigation: Launched in February, it has a 270-day deadline, but Trump’s team hints at a faster ruling.
U.S. Copper Market Flooded as Import Frenzy Crushes Tariff Premium Ahead of Trump Decision