Copper prices have surged above $11,000 per tonne in New York due to concerns over tariffs, with global trade disruptions stemming from US President Donald Trump’s tariff proposals. Trump’s directive to investigate copper imports has led to a spike in US prices, prompting traders to redirect metal to the US to avoid potential duties, resulting in reduced availability elsewhere.

On the COMEX, copper futures climbed to around $11,270 per tonne, marking a substantial premium compared to the London Metal Exchange where prices recently exceeded $10,000. This shift in pricing dynamics is attributed to the looming threat of US tariffs, according to Wei Lai, deputy trading head at Zijin Mining Investment Shanghai Co.

The current copper rally is part of the broader trade upheaval initiated by Trump as he seeks to reshape global trade policies. Previous actions have included imposing tariffs on steel and aluminum, targeting countries like Canada, Mexico, and China, and proposing reciprocal tariffs in the near future. Although the investigation into copper imports is ongoing, major financial institutions anticipate a 25% import duty by the end of the year.

The disparity between Comex and LME copper prices, with a 27% increase since the year’s start on Comex, has incentivized traders and producers to redirect supplies to the US, potentially amounting to over 100,000 tons. Noteworthy industry players such as Trafigura Group and Glencore are among those redirecting copper from Asia to the US.

Apart from tariff fears, other factors contributing to the price rally include a weaker dollar and supply chain constraints. Smelters are grappling with raw material shortages amidst a surge in demand from green industries. Major mining companies like BHP Group and Rio Tinto are ramping up production to meet this demand.

While traders stand to benefit from the price differentials, US manufacturers are already bearing the brunt of higher costs that account for potential tariffs. Aluminum premiums in the US have also soared following the implementation of a 25% import duty by Trump. These developments underscore the complex interplay between trade policies, market dynamics, and industry responses in the global copper market.