News Digest: Copper’s Hottest Trade Faces Risky End as US Tariff Timeline Accelerates
March 30, 2025
News Digest:
The global copper market is bracing for turmoil as the US prepares to impose tariffs on imported copper sooner than expected. Bloomberg reports that the Trump administration may introduce levies within weeks rather than months, disrupting traders who had banked on ample time to profit from the price gap between London Metal Exchange (LME) and New York’s Comex prices.
Copper futures on Comex hit record highs on Wednesday, while LME prices lagged, creating an arbitrage opportunity where traders could ship cheaper international cargoes to the US. However, an accelerated tariff timeline could turn this lucrative trade into a costly gamble if shipments arrive after tariffs take effect.
“It’s a race against time,” said Matt Schwab, head of investor solutions at Quantix Commodities LP. “The question is whether there will be a grace period for metal already on the water.”
Traders have been paying surcharges of $500 per ton — five times the usual premium — to secure copper for Comex delivery. With LME prices near $10,000 a ton and Comex trading $1,500 higher, this trade was considered highly profitable.
But with tariffs expected at 25%, or about $2,500 per ton, profits could evaporate. Shipping, financing, and acquisition costs risk turning gains into losses.
“If tariffs hit sooner, LME price appreciation may have run its course,” warned Michael Cuoco of StoneX Group Inc.. Analysts now question how much metal will make it to the US and the broader impact on global copper demand.
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