Copper markets face volatility amid US tariff uncertainty

Uncertainty regarding potential United States tariffs on refined copper is impacting global supply chains. As US inventories rise, copper reserves in China and other Asian markets have decreased, driving cathode premiums in China to their highest levels since October 2023.

The US is considering a phased tariff approach, potentially implementing a 15 percent tariff on refined copper imports in 2027, increasing to 30 percent in 2028. This policy ambiguity may encourage traders to move copper into US exchange warehouses, customs-monitored facilities, and commercial warehouses to capitalize on potential price differentials between COMEX and the London Metal Exchange (LME). Such movements could effectively create strategic copper reserves within the US, funded by private traders rather than the government.