Copper is trading above $14,000 a tonne as traders rush metal into the US ahead of an expected tariff decision, tightening physical markets on both sides of the Atlantic. ING research says the rally is not only about tariffs, but warns a delayed or narrower decision could unwind part of the recent gain.
Copper is trading above $14,000 a tonne, within sight of its record high, as importers race to bring metal into the United States before Washington's tariff decision lands. US copper imports topped 200,000 tonnes in July alone, the highest monthly total in at least 12 years, according to ING research.
Physical markets tighten on both sides
LME inventories have fallen to a five-month low. The cash-to-three-month spread has also widened into backwardation, pointing to a squeeze on short-term supplies. The gap reached about $120 a tonne, up from roughly $40 a week earlier and the widest since October.
Meanwhile, COMEX inventories have climbed to a record high as shipments into the US accelerate ahead of a potential tariff decision.
More than just a tariff story
ING says the rally is not solely tariff-driven. Mine supply growth remains constrained, and low treatment charges point to tight concentrate availability, while demand tied to electrification, power grid investment and AI infrastructure keeps buyers active.
ING expects the global refined copper market to run a deficit in 2026. It puts the shortfall at around 35,000 tonnes.
What happens if tariffs disappoint
If the final measures are delayed, narrower than expected, or exempt refined copper, ING says the recent rally could partly unwind. Stockpiling into the US would slow, inventory flows would normalize, and some of the tightness outside the US would ease. Any correction could be amplified if investors unwind positions built on tariff expectations.
Once the tariff decision is announced, ING expects the market's focus to shift back to underlying fundamentals. Any correction from here, it says, would more likely reflect a reassessment of tariff expectations than a deterioration in those fundamentals.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
