Copper prices rose on Monday as the dollar dipped against most major rivals amid concerns that US President Donald Trump might target the metal with tariffs.
Trump’s threats to impose tariffs on copper imports led to a massive surge in copper imports in the US as traders seek to stock up before tariffs.
The markets now widely expect 25% tariffs by the US on copper imports, same as the current steel and aluminum imports.
The tariff trade becomes clear with the price premium in the US Chicago exchange contracts compared to the London Exchange contracts.
Just three weeks ago, The cash premium was near $1600 per ton, or nearly 17% of the London price, but since then it has fallen to $600 a ton.
The drop in the premium comes as US copper imports surged to 40 thousand tons a week since late March, compared to 14 thousand tons a week previously.
Copper inventories at the Chicago Exchange rose by 81% so far this year to an eight-year peak at 152,919 tons.
Conversely, the inventories at the London Metals Exchange fell to a year low at 179,375 tons.
The impact of potential US tariffs extended to China, with inventories at the Shanghai Futures Exchange dropping from 268337 tons at a peak during the new lunar year holiday to just 108,142 tons now.
China’s refined copper imports fell 5% y/y, and 20% q/q between January and March as shipments shifted to the US.
China is considered the main destination to
The global copper inventories were little changed this year, hovering around 500,000 tons, down 1700 tons only since early, but the distribution balance is shifting towards the US.
Otherwise, the dollar index fell 0.8% as of 15:54 GMT to 100.2, with a session-high at 100.9, and a low at 100.06.
On trading, copper futures due in July rose 1.4% as of 15:48 GMT to $4.65 a pound.
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