Key Points
- Copper prices rallied to a new record high, surpassing $11,400 a ton.
- The primary driver is fear of potential U.S. tariffs, causing traders to hoard copper in America.
- This rush to the U.S. is draining global inventories and creating a worldwide supply squeeze.
- Producers are now charging record premiums to customers in Europe and Asia to make up for the difference.
Copper prices shot to a new record high on Wednesday as fears over a looming global supply shortage intensified. A sudden spike in orders for the metal, combined with anxiety over potential U.S. tariffs, is sending shockwaves through the market.
Prices on the London Metal Exchange (LME) jumped as high as $11,400 a ton, breaking a peak set just days earlier. The rally has been building for weeks, driven by warnings that global stockpiles could soon be drained to critically low levels. The main cause is a rush to ship huge volumes of copper to the United States in anticipation of new tariffs from President Donald Trump.
While the global benchmark price is up more than 30% this year, U.S. futures have climbed even faster. This price difference has created a huge incentive for traders to divert metal to American ports, leaving less for the rest of the world.
As a result, producers are now charging customers in Europe and Asia record-high premiums to compensate for the higher profits they could earn by selling to the U.S.
Major trading house Mercuria Energy Group recently warned that these dynamics could fuel a major global supply squeeze by early next year, pushing prices even deeper into uncharted territory.
This tariff-driven frenzy is compounding an already tight market. The copper industry has been struggling with a series of mine outages across Chile, Indonesia, and elsewhere that have restricted supply all year. With miners holding the upper hand in negotiations for future supply, the problem doesn’t appear to be easing anytime soon.
