Copper's tariff dislocation risks becoming structural split

LONDON, July 30 (Reuters): The copper market was expecting US President Donald Trump to decide on whether to impose import tariffs on refined copper at the end of June.

It's been waiting over a year for a final ruling and it's still waiting.

The deadline for Commerce Secretary Howard Lutnick to make a recommendation to the president has come and gone with the White House yet to give away any clues to its thinking.

There's a strategic incentive not to say anything. The threat of tariffs has generated a premium for US delivery, attracting huge volumes of physical copper.

The country has in the space of 18 months accumulated a significant stockpile of a metal that is critical to both green and technological revolutions.

This, however, is a problem for everyone else, as is becoming clear from the rapid declines in London Metal Exchange (LME) and Shanghai Futures Exchange (ShFE) stocks.

Moreover, the longer the tariff uncertainty reigns, the greater the risk of the current regional fracturing of the global copper market becoming a structural rift.

US STOCKPILE KEEPS GROWING

US imports of refined copper jumped by 80per cent year-on-year to 1.64 million metric tons in 2025.

Traders shipped metal through a wide arbitrage window as the CME's US price traded at a large premium over the international price traded on the London market .

The pace of arrivals has quickened again this year. Imports rose by 13per cent to 763,000 tons in the first five months, according to the World Bureau of Metal Statistics, which collates official customs figures.

The tariff distortion on global copper flows is clear to see in the distribution of global exchange inventory.

CME warehouses currently hold 58per cent of the world's visible copper stocks, a ratio that has been steadily rising ever since Trump ordered an investigation into copper imports in February 2025.

The CME's share is likely to continue growing as ShFE stocks get cleared out and the fight for a slice of the shrinking copper stocks pie moves to the LME.