LONDON: US copper futures hit a record high on Wednesday, expanding their premium over the London prices with rising bets on the level of import tariffs that US President Donald Trump may impose on the metal. The most active May copper futures on the US Comex exchange climbed 1.4% to $5.283 a pound, after hitting a record high of $5.374. Benchmark three-month copper on the London Metal Exchange (LME) was down 1.7% at $9,942 a metric ton by 1041 GMT after hitting $10,164.5, its highest since June 7 in early trading hours.
The premium on Comex copper over the LME price widened to a record. It was above $1,700 per ton for the Comex May futures and above $2,000 for the December futures.
“The market is now pricing in an 80% probability of the US 25% import tariff on copper,” said Dan Smith, head of research at Amalgamated Metal Trading.
“So, it’s not 100% baked in but the probability is getting higher.”
Technically, the probe can take up to nine months, but Bloomberg, citing people familiar with the matter, reported that the US copper tariffs could be coming within several weeks. US 25% tariffs on steel and aluminium products took effect earlier in March. Trump has also said that his “reciprocal tariffs” to bring US tariffs to other countries’ levels will take effect on April 2.
With the US importing about 40% of its needs in copper, mainly from Chile and Canada, the focus is on supplies to the US ahead of the possible decision and worries that attempts to divert the metal from other consuming regions would tighten the market.
Available LME copper inventories fell sharply to 111,000 tons since mid-February, but the spread between the cash LME and the three-month contract remains at a discount indicating no acute shortage for nearby supply.
On the supply side, Glencore declared force majeure on copper shipments from its Chilean Altonorte smelter, where production has been suspended, two industry sources told Reuters. Meanwhile, LME aluminium was steady at $2,608.50 a ton and lead fell 0.6% to $2,072. LME daily data showed major fresh cancellations for both metals in the LME-registered warehouses.
LME zinc dipped 0.9% to $2,943.50, tin declined 0.2% to $34,955 and nickel was flat at $16,150.
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