The copper price split may be just a blip

Copper’s having a moment - and not the kind you’d expect from a metal best known for quietly powering our homes, cars, and gadgets. Prices in the US have just shot to an all-time high, while markets in London and Shanghai seem to be shrugging it off. 

In fact, copper is now trading at a jaw-dropping 25 percent premium in New York compared to the global benchmark. That’s not just unusual - it’s historic.

So, what’s going on? Is this a one-off market wobble triggered by tariff threats and trader panic? Or is copper flashing a warning light that something deeper is shifting in the global economy? 

Let’s take a closer look at the split that’s got everyone from miners to manufacturers scrambling.

US copper tariffs: The spark behind the surge

It all started with a bold declaration. During a Cabinet meeting, former US President Donald Trump dropped a bombshell - plans to slap a 50 per cent tariff on copper imports. That single sentence sent markets into a frenzy. 

Within hours, copper futures on the New York Comex surged by a record-breaking 17 percent, briefly hitting 5.89 dollars per pound - a level never seen before.

Meanwhile, in London, the mood was far less dramatic. Prices on the London Metal Exchange, which usually sets the tone for global copper trading, actually dipped 1.5 percent. 

Shanghai’s market followed suit, leaving traders scratching their heads: Why is the US price flying solo?

A Copper market playing catch-up

Analysts note that copper doesn’t usually behave like this. It’s one of the most globally traded industrial metals, and pricing tends to stay relatively aligned across major exchanges. A small premium in one region? Sure. But 25 per cent? That’s like paying extra for a meal in New York because it might rain next week.

According to reports, tariff talk sparked a mad dash to stockpile copper in the US before prices climb even higher. Traders have been shipping record volumes into the country, hoping to beat the clock. And with fears of tighter supply, buyers are willing to pay more - a lot more - just to lock in what they can.

Copper market divergence: Blip or bigger problem?

Now, here’s the real question: Is this all temporary panic or the start of a long-term split in the copper market? Analysts are divided.

Some experts, including those at Morgan Stanley, believe the price surge could be short-lived. Once US inventories catch up and the market calms down, Comex prices may settle back into alignment. Traders hoarding copper now could find themselves sitting on expensive stock if demand doesn’t keep pace.

Others, however, see something more structural brewing. The US relies on imports for more than half of its refined copper, much of it coming from Chile, Canada, and Mexico. 

While America has rich copper reserves, it lacks the refining muscle to meet domestic demand. Tariffs might protect producers on paper, but they could just as easily saddle manufacturers with sky-high input costs. That’s hardly a recipe for industrial revival.

Why this matters more than you think

Copper isn’t just any old metal. It’s the lifeblood of the modern economy - and the green one we’re building. From electric vehicles and wind turbines to smartphones and data centres, copper is everywhere. If prices spiral in one region, it doesn’t just hit traders. It hits construction firms, automakers, and clean energy projects, too.

And there’s also the geopolitical ripple effect. If the US becomes a high-cost copper island, suppliers may start looking elsewhere, like China, for more stable and long-term trade relationships. In a world already feeling the strain of supply chain tensions, this price divergence could widen the gap even further.

So, where do copper prices go from here?

For now, there’s plenty of copper sitting in US warehouses, albeit at eye-watering prices. But the long-term picture remains murky. The market still doesn’t know when the tariffs will actually kick in, whether any products will be exempt, or if this divergence will force a deeper reshaping of global copper flows. 

What’s clear is that markets don’t like uncertainty, and copper’s recent behaviour is a textbook example of what happens when policy, speculation, and supply chains collide. 

Is the copper price split just a blip? Maybe. But if it is, it’s a blip with consequences. Because in today’s world, when a metal like copper breaks away from the pack, it’s rarely just about price - it’s about power, policy, and what comes next.

LME copper prices outlook

At the time of writing, Copper prices (LME) are under pressure with the latest green bar forming a massive wick, hinting at strong sell pressure. However, the volume bars indicate that sell pressure is waning, hinting that a move downwards could be curtailed. If a move downwards materialises, prices could find support at the $9,540 and $9,400 support levels. Conversely, if we see an uptick, prices could find resistance at the $10,000 price level.