Copper's record rally rested on traders shipping metal to the US ahead of possible tariffs, and that trade is unwinding. Macquarie says prices could crash toward $10,000 a ton without tariffs, or jump to $18,000 if they arrive.
At a glance
- The premium of New York's Comex copper over the London Metal Exchange price has collapsed in recent weeks.
- US-bound copper shipments from Africa are dwindling as the price gap closes, according to ship-tracker Kpler.
- The US Commerce Department has recommended phased tariffs of 15% in 2027 and 30% in 2028.
Background
Copper trades on two main exchanges: the London Metal Exchange (LME), the global benchmark, and Comex in New York. Since President Trump first proposed copper tariffs in February 2025, Comex has traded at a big premium, because US prices would include any duty. Traders profited by shipping metal into the US, which drained stocks elsewhere and pushed LME prices to records.
What happened
Copper bulls are growing wary that prices could crash if Trump does not follow through on tariffs, Bloomberg reported. The flow of metal into the US helped drive LME copper to a record near $15,000 a ton last month. Three-month LME copper traded little changed at $14,436 a ton on Monday morning in Shanghai.
Macquarie Group says prices could slump toward $10,000 a ton if tariffs are ruled out. They could instead rally as far as $18,000 if tariffs are announced with a delay that lets traders ship even more metal to the US. Analysts at Natixis have warned that the tariff trade has created a bubble.
Why the trade is unwinding
The gap between Comex and LME prices has collapsed in recent weeks. The decline sped up after a Reuters report last month that Trump's copper tariff plans had stalled over inflation worries. Marc Bailey, chief executive of brokerage Sucden Financial, said investors are again asking about selling Comex and buying LME, a bet against tariffs.
The physical market is shifting too. US-bound shipments from Africa are dwindling as the spread narrows, according to Kpler. Alastair Munro of Marex said there is "a growing eagerness to be short copper more generally on a bearish macro view". Traders cite high energy prices, rising interest rates and a faltering stock market.
Why bulls are not giving up
Few traders expect Trump to rule tariffs out entirely, because that could release the huge stockpiles in US ports back onto world markets. The Commerce Department has recommended phased levies of 15% in 2027 and 30% in 2028. Bank of America says contango financing deals, in which traders hold metal and sell it forward at a profit, could keep US stocks from flowing out even without tariffs.
For Indian buyers, the outcome matters because LME prices set the base for copper imports and MCX prices. US mid-term elections on November 3 are seen as the next test of Trump's trade agenda.
Our read
Outlook: neutral. The outlook hinges on one policy decision, with Macquarie's range running from $10,000 to $18,000 a ton. Traders are leaning bearish, but a tariff announcement would flip that.
What to watch
- Any tariff announcement from the White House after the November 3 mid-term elections.
- The Comex-LME spread, which shows how traders are betting on tariffs.
- Copper flows out of US port stockpiles if the tariff premium disappears.
For information only, not investment advice.
Copper price in India
metalscost.com India reference price as of 2026-11-07.
Detailed analysis
Timeline
- 2026-11-03: US mid-term elections, seen as a test of Trump's trade agenda.
Inventory Drivers
Huge stockpiles in US ports could flood back to world markets if the tariff premium disappears.
Trade Tariffs
Copper's price now hinges on whether Trump imposes tariffs; the Commerce Department suggested 15% in 2027 and 30% in 2028.
Interest Rates
Rising rates and high energy prices are feeding a bearish macro view among traders.
What could lift prices
- A tariff announcement with a delay could restart shipments to the US and push prices toward $18,000.
- China's inventories have been drawn down hard, so restocking could add demand.
What could weigh on prices
- If tariffs are ruled out, Macquarie sees prices falling toward $10,000 a ton.
- Shipments to the US are already slowing as the Comex premium collapses.
Country impact
| Country | Impact | Reason |
|---|---|---|
| United States | High | Its tariff decision and port stockpiles now drive global copper prices. |
| India | Medium | LME prices set the base for India's copper imports and MCX prices. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Commodity Trading | Neutral | The profitable US import trade is fading, but contango financing deals remain. |
Who gains, who loses
- Copper buyers outside the US: Metal that stops flowing to the US eases supply elsewhere.
- Traders long the Comex premium: The spread they bet on has collapsed in recent weeks.
Other ways this could play out
- If Trump announces tariffs after the mid-terms, metal could again be pulled into the US and prices could rally.
- If tariffs are ruled out, US stockpiles could flow back out and prices could fall sharply.
Price risks
- A surprise tariff announcement would hit traders betting against them.
- A weaker global economy would deepen any fall if the tariff premium fades.
Historical comparison
- July 2025: Trump put 50% levies on downstream copper products but spared refined copper, and Comex prices crashed.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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