Copper: Tariff-driven tightness faces policy risk – ING
ING Commodities Strategist Ewa Manthey highlights that Copper has surged back near record highs as traders accelerate shipments into the US ahead of potential import tariffs, tightening physical markets and draining LME inventories.
ING Commodities Strategist Ewa Manthey notes that copper prices have climbed back to near-record highs as traders rush to stockpile ahead of potential import tariffs. Tight physical markets and dwindling LME inventories are tightening supply, while mine production growth remains limited and low treatment charges point to scarce concentrate availability.
Demand from electrification, power infrastructure and AI projects continue to support prices, but a policy disappointment or narrower-than-expected tariffs could lead to a correction and partially reverse recent gains. Copper is trading above $14,000/t, while LME inventories have fallen, and the cash-to-three-month spread has moved into backwardation, signaling increasingly tight conditions.
US copper imports hit a record high in July, with shipments accelerating ahead of a potential tariff decision. The London copper market also shows signs of tightness, with LME inventories at a five-month low and the cash-to-three-month spread widening to around $120/t backwardation – the widest since October. The global refined copper market is expected to record a deficit of about 35,000 tonnes in 2026.
Recent rallies are largely due to expectations of implemented tariffs, but delayed or narrower measures could unwind part of the recent gains, slowing stockpiling and normalizing inventory flows.
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