The looming threat of U.S. copper tariffs under the Trump administration has triggered a global scramble to ship metal stateside, draining LME inventories and creating windfall profits for traders capitalizing on a $600/ton premium for COMEX copper over London prices.
Why the Surge?
- Tariff Panic: After Trump ordered a February probe into potential copper import duties, COMEX prices spiked to a record 11,633/ton∗∗(March26),openinga∗∗11,633/ton∗∗(March26),openinga∗∗1,570/ton arbitrage vs. LME.
- Import Tsunami: U.S. copper imports more than doubled to 123,000 tons in March (vs. 58,000 in February), with analysts predicting 250,000–300,000 extra tons for March–May.
- LME Warehouse Raid: Stocks in LME-registered warehouses collapsed 60% since mid-February to 170,750 tons as metal was rerouted to the U.S.
Trade Anomalies
🚢 Bulk Carrier Boom: Traders are bypassing slow container ships for bulk carriers (transit time: 2 weeks vs. 40 days), with Kpler data showing:
- 127,539 tons arrived in April (vs. 44,000 in Jan–Feb).
- Unusual shipments from Germany and Spain (10,000 tons total)—rare suppliers to the U.S.
💵 Profit Motive: Even after the COMEX premium eased to $600/ton, traders say margins remain “super-normal” (Macquarie).
Market Fallout
- Supply Squeeze: LME stocks at multi-year lows could amplify price volatility.
- China Diversions: Some U.S.-bound copper is being pulled from Chinese supply chains.
- Tariff Countdown: Trump has until late June to decide, keeping traders on edge.
What’s Next?
- More Atypical Shipments: Expect further unusual flows (e.g., European copper) while the arbitrage holds.
- Price Risks: A tariff decision could reshape global trade flows—or trigger a COMEX premium collapse.
Trump’s Copper Tariff Threat Sparks Global Trade Frenzy – LME Stocks Plunge 60% as Traders Race to Cash In