Amid tariff panic, a "Copper Rush" is unfolding in the USA.

According to Bloomberg, the USA is about to experience a massive influx of copper shipments, with an estimated 0.1-0.15 million tons of refined copper expected to arrive in the coming weeks. If all of it arrives in the same month, it will exceed the historical record of 136,951 tons set in January 2022. Commodity traders such as Trafigura, Glencore, and Gunvor are redirecting large amounts of metal originally planned for Asia to the USA.

Analysts believe that the global copper trade landscape is being reshaped, with rising premiums in the USA leading to price distortions. China may face supply shortages, all originating from the tariff policies that the Trump administration might implement, a situation that supports copper prices in the short term.

On Thursday during the Asian session, LME copper futures prices reached 0.01 million USD, the highest since October last year. So far this year, Comex copper futures prices in the USA have risen by more than 25%, while LME prices have increased by around 13%.

Currently, Comex copper futures prices in the USA are close to the historical high set in May last year, with LME copper premiums rising to over 1,200 USD per ton, a premium rate of 12%, nearing the historical high set in mid-February.

The threat of tariffs has triggered a "Copper Rush."

Last month, President Trump of the USA signed an executive action plan directing the Department of Commerce to begin investigating the threat posed by Copper imports to National Security and to propose methods to mitigate such threats. The order states that mitigation measures may include "potential tariffs, export controls, or increased incentives for domestic production."

The Department of Commerce has up to 270 days to report back to Trump, which provides importers a window period to import before potential tariffs are implemented.

Goldman Sachs and Citigroup expect that the USA will impose a 25% import tariff on Copper by the end of the year. However, even with the tariff, American Copper buyers have no choice but to continue purchasing imported Metal, as the Copper consumed in the USA is twice its production.

Domestic consumption in the USA relies on Copper imports, with Chile being the largest supplier, accounting for 41%, followed by Canada at 27%.

With Copper stocks steadily increasing, American buyers continue to seek more Copper from countries like Chile and Peru. Media reports suggest that considering Trump's comprehensive tariffs on major trade partners of the USA, some Metal from mines in Mexico and Canada may be redirected to Europe.

Goldman Sachs Analysts predict that by the end of this year, all forms of Copper shipped to the USA will be affected by tariffs, which will result in US Comex prices being significantly higher than other benchmark prices.

Premiums are reshaping the Copper trading landscape.

Analysis suggests that the premium has created a profitable environment for producers and traders, allowing them to take advantage of price differences between the USA and Other markets. Citigroup Analyst Tom Mulqueen points out that this may signify a broader reshaping of the supply chain.

According to ING Groep's research department, the tariff threats have led traders to move Copper from Global LME warehouses to the USA to exploit arbitrage opportunities. Since Trump won the presidential election, CME Copper inventories have been steadily rising. Most goods entering the USA come from South America, but there are also some from Asia. London Metal Exchange inventories have seen a slight decline.

Meanwhile, since the end of February, LME Copper warrant cancellations have surged, with the largest cancellations occurring in Asia, followed by Europe. Orders for extracting Metal from LME warehouses in Asia have skyrocketed to the highest level since August 2017.

If the demand grows faster than expected, the Copper boom in the USA may lead to tightened supplies of Copper elsewhere in the world. Goldman Sachs Analysts expect a shortfall of 0.18 million tons in the global market this year.

ING analysts point out that in the short term, as the USA continues its investigation into Copper imports, Copper prices may remain supported as more Metals enter the USA before potential tariffs. In the future, if tariffs are imposed, Copper prices in the USA may face further upward risks; however, if any potential tariffs are lower than expected, the price gap may contract.

Editor/jayden