(Bloomberg) — Traders who have been paying dearly to ship copper to America before US President Donald Trump imposes import tariffs on the metal now face a high-stakes race to get shipments there in time.
Most Read from Bloomberg
The global copper market was turned on its head in January when Trump first talked about imposing tariffs on imported copper. Now, there’s fresh angst after Bloomberg reported that the US administration aims to introduce levies within weeks instead of months as had been widely anticipated.
Futures contracts on New York’s Comex exchange spiked to fresh all-time highs on Wednesday and benchmark prices on the London Metal Exchange traded at a record discount to those in the US. The price disconnect — which has been growing since January — means that on paper traders stand to make a fortune by buying up cheaper international cargoes and shipping them to the US before tariffs are imposed.
But traders face the prospect of huge losses if their copper cargoes arrive on US shores after tariffs land. An accelerated timeline for implementing tariffs would disrupt a market that assumed it would take months for levies to take effect, leaving ample time to ship copper from as far afield as Latin America, Africa and even Asia.
“It’s a race against time,” Matt Schwab, head of investor solutions at US hedge fund Quantix Commodities LP, said in an interview. “But there is a question of whether there will be a grace period for metal already on water.”
The clamor for metal has been so intense in recent weeks that traders have been offering as much as $500 a ton on top of LME prices to get copper that can be delivered onto the Comex, according to people familiar with the transactions. Normally, such surcharges hover around $100 — but with LME prices trading around $10,000 a ton and Comex prices about $1,500 higher, traders have been willing to pay over-the-odds to get the metal in recent weeks, said the people, who asked not to be named discussing commercial matters.
Copper futures in New York traded 0.5% higher at $5.2685 a pound at 10:59 a.m. in Shanghai on Thursday, just below their record, while on the LME, the metal rose 0.5% to $9,978 a ton.
In an industry that normally survives on razor-thin margins, Kostas Bintas — the high-profile head of metals trading at Mercuria Energy Group Ltd. — has said it’s the most profitable trading opportunity he has ever seen.
To be sure, the timing of tariffs has always been a major risk for the arbitrage trade, given that it can take months for vessels to sail from Asia or Africa to the US. But shipments accelerated last month after Trump ordered a formal probe to support his plans to introduce import tariffs on national security grounds. Such reviews normally take months, and traders expected billions of dollars of copper to arrive before the tariffs take effect.
However, the US Commerce Department’s copper investigation is shaping up to be more of a formality, and tariffs could be introduced months ahead of the official deadline, Bloomberg reported Tuesday.
The consensus among analysts — and the suggestion from Trump — is that the import levy will be set at 25% — or roughly $2,500 based on where LME copper was trading Wednesday. That could wipe out profits entirely for traders who have already locked in the spread between Comex and LME prices, which has traded between about $250 and $1,700 since Trump first floated copper tariffs in January.
Traders could also lose out on money they’ve paid to get hold of the metal, as well as shipping and financing costs — potentially turning one of the copper market’s most lucrative trades into an unusually painful one.
As a result, analysts are rapidly rethinking their assumptions about how much metal will make it to the US, and what the impact on prices will be.
Traders and analysts were previously betting that the global copper market could see a severe deficit as hundreds of thousands of tons of metal was shipped to the US, in a trend Geneva-based Mercuria said could lift LME prices to all-time highs. But if less metal flows to the US, the likelihood of a supply-driven rally grows more remote.
“If the tariffs come within weeks and not months, that would support the view that LME price appreciation has run its course,” said Michael Cuoco, who’s head of hedge fund sales for metals and bulk materials at StoneX Group Inc.
And beyond the immediate turbulence that the mooted tariffs are causing in global trade flows, analysts are increasingly turning their attention to the impact that swiftly imposed levies will have on manufacturers in the US and beyond.
“The tariffs will likely be a negative for copper demand globally, as tariffs increase US domestic prices for goods containing the metal,” Bart Melek, global head of commodity strategy at TD Securities, said in an interview. “Tariffs, on the margin, are also set to throttle the Chinese economy.”
–With assistance from Julian Luk and Winnie Zhu.
(Adds prices in seventh paragraph)
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
