Copper Price Surpasses $14,000 as U.S. Tariff Decision Looms Amid Soaring Inventories

Foreign media reported on Thursday (4th) that international copper prices rose to their highest level in two months, briefly touching $14,000 per ton in the London market. Traders are closely monitoring the significant and ongoing increase in U.S. copper inventories, as well as the expected decision by U.S. President Trump on whether to impose tariffs on imported copper.

Copper futures on the London Metal Exchange (LME) rose for a second consecutive trading day, extending last month’s gain of over 3%. According to shipping data compiled by IHS Markit since 2014, more than 200,000 tons of copper arrived at U.S. ports in July, marking the largest single-month import volume on record.

The surge in copper inflows into the U.S. has led to continued accumulation in warehouses and ports, while simultaneously reducing supply availability for buyers in other regions.

Despite uncertainty over whether the U.S. will impose tariffs on refined copper, copper inflows into the country continue to rise. The U.S. Department of Commerce was originally scheduled to submit its recommendation report by June 30, but the final decision remains unannounced. With U.S. copper prices still above LME prices, this arbitrage trade remains profitable.

Meanwhile, copper inventories in the LME warehouse system have dropped to a five-month low. Traders say some copper has been shipped to China to alleviate local supply shortages. Chinese copper processors have largely adopted a 'hand-to-mouth' procurement strategy this year, keeping overall inventory levels low.

Copper prices have risen approximately 12% year-to-date, having previously hit a record high in January. The strength in copper prices has been driven by market expectations around U.S. trade policy, as well as robust global demand outlook fueled by energy transition and AI infrastructure development, which continues to boost market confidence. At the same time, new copper deposits are becoming harder to find, and development costs continue to rise.

Recent signs indicate tightening supply conditions in the LME copper market. The backwardation in copper prices has widened further, reflecting ongoing short-term supply tightness. The nearby delivery contract is now trading at a premium of $99.50 per ton over the three-month futures contract, up from around $30 a week ago, marking the largest backwardation since January this year.