US tariff threat disrupts copper surplus as prices near all-time peak

Copper prices on the London Metal Exchange climbed to $14,343 per metric ton on August 25, approaching the all-time record of $14,527.50. The catalyst isn’t a mine collapse or a sudden surge in demand from electric vehicle makers. It’s the prospect of US tariffs reshaping global copper flows in ways that make the textbook surplus almost irrelevant.

The threat of Section 232 tariffs on refined copper imports has triggered a rush of metal into American warehouses, swelling COMEX inventories to a record 675,185 metric tons after 46 consecutive days of gains. Every ton parked stateside is a ton that isn’t available to buyers in Europe, Asia, or anywhere else.

A surplus that doesn’t feel like one

Earlier this year, CRU projected a comfortable 639,000-ton global copper surplus for 2026. US refined copper imports hit roughly 885,000 tons in the first half of 2026 alone, a 3% increase year-on-year. For context, full-year 2025 saw a record 1.64 million tons flow into the country.

If a significant chunk of a 639,000-ton global surplus gets rerouted into COMEX warehouses before tariffs kick in, the rest of the world’s copper market tightens considerably. A surplus in aggregate doesn’t help a manufacturer in Germany or South Korea if the metal is locked up in a New Orleans warehouse.

The tariff timeline adding to the uncertainty

The proposed tariffs would impose a 15% levy on refined copper imports starting January 1, 2027, escalating to 30% by 2028. The US Commerce Department missed its deadline for advising on the phased tariff proposal, and traders and importers, unable to plan around a firm date, are defaulting to stockpiling now.

This behavior has widened the price spread between COMEX and LME copper contracts. When US-bound metal commands a premium because of anticipated tariffs, arbitrage traders step in to ship more copper to America, further depleting inventories elsewhere. The 46-day streak of rising COMEX inventories tells the story: warehouses are filling because the market expects future imports to become significantly more expensive.

Global mine supply isn’t the problem, distribution is

This isn’t a story about the world running out of copper. Global mine supply appears broadly adequate when measured in total output. The disruption is about where the metal ends up and at what price. Copper that would normally move through established trading routes is being diverted, creating regional imbalances that push prices higher even without a fundamental shortage.

What to watch from here

The gap between COMEX and LME prices is the single most important indicator to monitor. A widening spread signals continued tariff-driven stockpiling and further tightening of non-US supply. The Commerce Department’s eventual recommendation on the Section 232 tariffs will be the next major catalyst. If the proposed 15% to 30% phased structure is confirmed, expect the current trends to accelerate. If the timeline gets pushed back or the rates get reduced, some of the premium baked into COMEX contracts could unwind rapidly.

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