Copper Soars to Record Highs Amid Supply Risks and U.S. Tariff Threats

New York | EcoPulse24

Copper prices have risen sharply in global markets, with the benchmark price reaching approximately $5.8535 per pound, an increase of $0.087, keeping the industrial metal trading near its historical highs. This surge is fueled by mounting concerns over global supply and renewed discussions about potential U.S. tariffs on copper inputs.

In late December, U.S. copper futures climbed to around $5.5 per pound, their highest since a sharp rally in July, when threats by then-President Donald Trump to impose tariffs on copper inputs pushed prices to a record peak near $5.8 per pound.

Recently, Trump reaffirmed his intention to impose tariffs on major industrial metals, pledging to levy new duties on basic copper commodities by next year. If implemented, these measures would add to the existing 50% tariffs on semi-finished copper products.

Previous tariff actions led to a wave of selling in U.S. copper futures when broader categories such as cathodes, anodes, and concentrates were exempted, partially easing the shock. However, renewed concerns have since resurfaced.

On the supply side, copper prices received further support from a decline in global mining output. Freeport-McMoRan suspended operations at Indonesia’s Grasberg mine - which accounts for about 3% of global supply - after a fatal accident. Expectations are also rising for slower output in Chile and Peru due to protests and social unrest.

In response, Chilean state miner Codelco has offered record-high prices to Chinese buyers, forcing Chinese copper smelters to accept zero processing fees for next year, a clear sign of a tightening market and increased bargaining power for producers.

Collectively, these developments create a supportive environment for copper prices in the near and medium term, as geopolitical and trade factors intersect with global supply constraints, underscoring copper’s sensitivity to economic and political shifts worldwide.

It should be noted that the copper price cited in this report is quoted in US dollars per pound, reflecting trading on the US COMEX market, while copper contracts on the London Metal Exchange (LME) are priced in US dollars per metric ton. Differences in pricing units and reference markets can result in minor and temporary price variations between the two markets, which are considered normal and reflect factors such as trading timing, delivery costs, inventory levels, and global trade flows, rather than any discrepancy in overall price direction.