Global Copper prices have continued to rise recently, with the price of Copper on the London Metal Exchange (LME) nearing the $10,000 per ton mark. Market concerns about the Trump administration imposing tariffs on Copper have triggered a rush for imports in the USA. This "Copper rush" could lead to a severe imbalance in global Copper stock distribution, causing a new round of volatility in the Metal market.

Currently, the London price of Copper has risen to the highest level since October, now reported at $9,797 per ton, an increase of nearly 12% this year. Citigroup has stated that within the next three months, Copper prices will break through the $10,000 per ton barrier, and the Global Copper market will remain tight until the USA's import tariff policies become clear.

Goldman Sachs has indicated that by the end of the third quarter, the rise in Copper prices will cause USA Copper stocks to surge from the current 95,000 tons to at least between 300,000 and 400,000 tons, accounting for 45-60% of the Global reported inventory. They have maintained their prediction that the average LME three-month Copper price will reach $10,200 per ton in the third quarter.

USA Copper stocks may soar dramatically, as the mismatch between supply and demand and the expectations of tariffs dominate price trends.

In late February, according to CCTV news, Trump ordered a national security investigation into Copper imports in the USA. This move is seen as the first step towards imposing potential tariffs on this Metal, and the policy has led to a surge in Copper imports in the USA, with traders competing to stockpile Copper resources in anticipation of possible tariff policies. Goldman Sachs Analysts expect:

"Copper imports in the USA may increase by 50% or even 100% in the coming months. By the end of the third quarter, the rise in Copper prices will cause USA Copper stocks to surge from the current 95,000 tons to at least between 300,000 and 400,000 tons, accounting for 45-60% of the Global reported stocks, while inventories in Other regions will be very low."

This large-scale hoarding behavior has created enormous arbitrage opportunities. As of last week, the May Copper Futures contract on the CME Group was $800 per ton higher than the corresponding contract in London.

Citigroup analysts believe that the tightness in the physical markets outside the USA may last until May/June, temporarily offsetting the price resistance brought by the broader USA tariff announcements.

However, despite concerns about the USA economic outlook, Industrial Metals prices have remained relatively stable. The rise in Copper prices is supported not only by the USA tariff policy but also by the increasing scarcity of raw materials, as demand is growing faster than Global mine expansion.

Goldman Sachs predicts that the Global Copper market will face a supply gap of 0.18 million tons by 2025, mainly due to strong electrification demand and slower growth in mineral supply. This supply gap is expected to be concentrated in the second half of this year due to seasonal factors.

Although Citigroup maintains the view that Copper prices will rise in the short term, it also warns that:

“Once the USA Copper import demand collapses due to tariffs, it is expected that Copper prices may fall as the implementation of the Section 232 Copper tariffs approaches.”

Goldman Sachs maintains its prediction that the average LME three-month Copper price in the third quarter will reach 10,200 USD/ton, and expects that the LME September-December contract price difference may reach a maximum of 350 USD/ton in a backwardated market state, which is sufficient to close the USA import arbitrage window.

Editor/ping