London Copper Surges Back Above $10,000 On US Tariff-Driven Fears

Copper prices on the London Metal Exchange surpassed $10,000 per ton on Thursday, driven by concerns over President Trump’s potential tariff expansion on the crucial industrial metal used in everything from electric vehicles to power grids. Traders are rushing to deliver copper into the US before potential tariffs later this year. 

On Feb. 25, President Trump signed an executive order directing the US Department of Commerce to investigate the potential national security risks of copper imports, which could lead to tariffs on all copper imports—including raw mined copper, copper concentrates, refined copper, copper alloys, scrap copper, and certain derivative products. Since then, US prices have surged, and traders have been rushing to send their metal to the US ahead of tariffs, thereby tightening global supplies. The Secretary of Commerce will submit a report to the president 270 days from when the executive order was signed. 

According to BMO analysts, while the destination of copper exiting LME warehouses remains unknown, US trade data shows copper imports are increasing. 

“This is a round of cross-regional repricing triggered by potential US tariffs,” said Wei Lai, deputy trading head at Zijin Mining Investment Shanghai, adding, “Cargoes are lured to the US, leaving other places in shortfall. Buying sentiment is very strong.”

On Thursday, LME copper prices increased by a half percentage point to $10,046 a ton — the highest level since October — while prices on New York’s Comex inched closer to record highs. 

The spread between the copper Comex futures and LME futures widened to more than $1,254 per ton this week, surpassing its February peak of around $1,149. 

“Copper just keeps grinding as it takes out $10k, we said it will overshoot, and its overshooting! Nothing more to my eye than this is when GIR expect refined metal tightness to deliver deficits (2Q25 onwards) and US is dragging metal in that will be stranded,” Goldman analyst James McGeoch penned in a note to clients earlier. 

Last month, Goldman’s Eoin Dinsmore and others reinitiated their coverage of copper with a new medium-run $10,500-11,500/t range forecast. This call was based on three drivers:

1. Strong Electrification Demand. We believe the electrification megatrend will continue to reshape copper demand. That became clear in 2024, when despite a 10% drop in copper demand from the China construction sector, electrification drove a solid 4% YoY increase in China refined copper demand. Electrification will account for all copper demand growth to 2030. And the grid alone makes up over 50% of the growth, adding the equivalent of another US to global copper demand.

2. China Copper Stimulus. Copper demand is set to disproportionately benefit from China stimulus in sectors such as appliances and EVs. We estimate China stimulus will add 2pp to China copper demand growth, while tariffs knock off only 0.8pp. We forecast China refined copper demand to grow by 4% in 2025, as the boost from structural electrification and stimulus well outweigh the drags from weakness in construction and tariffs. However, several stimulus programs pull forward demand, with copper demand growth slowing markedly from 2027.

3. Ali Cap and Chile Floor. Copper demand will rise by 4Mt by 2030, requiring substantial growth in mine and scrap supply. We believe that substitution away from copper (when the copper price trades >4x the aluminium price) will cap the copper price at $10,500/t in 2025 and $11,500t in 2026. Mine supply growth will primarily come from short lead-time, low capex mines in DR Congo, but maintaining stable supply from Chile remains crucial. A price of $10,500/t will be needed by 2026 for enough new mine capacity to be developed and to avoid large deficits by the early 2030s. We think the scrap share of total demand will remain flat, offering little relief to future market tightness.

The Commerce Department’s investigation into copper imports is unlikely to deliver recommendations for the president until the end of the year. In the meantime, copper supplies flow into the US while global supplies tighten.