Copper: Tariff uncertainty and tight supply – BNY
BNY’s Geoff Yu notes Copper is surging as tighter availability meets uncertainty over United States (US) tariffs, with shipments to the United States draining inventories elsewhere and constrained mine output leaving the market exposed to squeezes.
Copper prices are surging due to a combination of restricted availability and uncertainty surrounding U.S. tariffs. The metal reached a two-month high near $14,000 per ton in London, accompanied by steep LME backwardation, indicating short-term scarcity. Over 200,000 tons of copper arrived at U.S. ports in July, the highest monthly inflow in shipping records, causing supply shortages and pushing the market toward tightness.
Mines are producing less copper, leaving the market vulnerable to further shortages. While tariffs could shift flows, they cannot generate additional copper. Copper has risen approximately 12% this year, influenced by speculation on trade policies and expectations of growth in energy transition and artificial intelligence infrastructure. However, some demand from China has waned as prices have stayed high.
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