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Copper squeeze unravels with window closing to beat Trump tariff

9th July 2025

By: Bloomberg

  

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An acute copper supply squeeze is coming to an abrupt end as President Donald Trump’s plan to soon slap a 50% tariff on the metal narrows the window to profit from surging US prices.

Key spreads on the London Metal Exchange — which had soared in late June as a rush to ship the metal to the US drained stockpiles — have now collapsed.

The latest indication from the White House that a levy is imminent means time is running out to seek to front-run the policy and profit from arbitrage. Shipments from European and Asian sheds take weeks to reach American shores, and cargoes will soon risk arriving after tariffs are in place.

Spot copper on the LME traded lower than three-month futures for the first time in more than a month, a sign demand for metal in the exchange’s warehousing network is fizzling rapidly. A key one-day spread has also plunged.

Commerce Secretary Howard Lutnick, speaking to CNBC shortly after a Cabinet meeting, said his department’s investigation into copper had concluded and he expected the levy “likely to be put in place end of July — maybe Aug. 1.”

“Copper is finished. We’re done with our study,” Lutnick said. “We’ve handed the study over to the president. The president knows that he has the ability, since we’ve studied the market for copper, to set the market tariff for copper.”

For months, copper has poured into the US as traders raced to buy up the metal elsewhere and sell it at higher prices in New York. Once those tariffs are in place, that arbitrage opportunity disappears, easing demand for spot copper in Europe and Asia.

New York futures posted a record jump to an all-time high on Tuesday after Trump’s off-the-cuff announcement of the 50% duty.
 

Edited by Bloomberg

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