FX.co ★ Copper Rises to Record High

Copper futures in the United States have climbed to an unprecedented $5.8 per pound as the consequences of US-imposed tariffs on copper have been exacerbated by a softer pessimism surrounding manufacturing. The United States has stated that refined copper will be subject to these tariffs, with the objective of bolstering the domestic copper industry and reducing reliance on imports. This has consequently widened the premium of US copper over that of similar futures on the London Metal Exchange, reaching a historic high of 30%. Meanwhile, global benchmarks have declined, indicating a halt to the escalation of domestic stockpiles as traders began directing copper into the US in response to the initiation of tariff threats on base metals back in February. Should these tariffs be enacted, they would pose a significant risk to domestic supply, since the US imports nearly 50% of its copper consumption, primarily from Chile. The existing refinement and smelting infrastructure could face significant strain, given that the US operates only two smelters. Furthermore, China's extensive infrastructure projects and the easing of tariffs against Japan have also provided support for the base metals market.