- US tariff fears reshape global copper flows
- CME-LME copper spread nears $1,000/t
The global copper market has once again entered a phase of uncertainty as the US prepares to decide on potential tariffs on refined copper imports by end-Jun’26. Expectations of phased import duties are already reshaping global trade flows, driving higher copper inflows into the US and tightening material availability across other regions.
Market participants are increasingly pricing in tariffs of around 15% from 2027 and potentially 30% from 2028. This expectation has pushed the premium of CME copper futures over LME prices sharply higher in forward contracts.
The CME-LME arbitrage has become a key indicator of market sentiment. Simply put, CME copper reflects prices for delivery within the US market, while LME represents international benchmark prices. When traders expect future tariffs, copper inside the US becomes more expensive because imported material could face additional duties. As a result, CME prices rise faster than LME prices, creating a premium or “gap” between the two exchanges.
As of 26 May’26, combined copper inventories across the LME, COMEX, and SHFE stood at 1.28 mnt, the highest level ever recorded for this period. COMEX alone accounted for nearly 45% of global exchange inventories, reflecting aggressive inflows into US warehouses over the past year.
Currently, the spot CME premium over LME is around 3%, while forward spreads for Mar’27 have approached nearly $1,000/t, indicating that traders continue to build tariff expectations into future pricing.
The widening price gap has triggered another wave of copper shipments into the US market. Traders are moving material from LME warehouses and other global destinations into COMEX-approved warehouses to benefit from higher US prices before tariffs potentially come into effect.
The proposed tariffs are part of the US Section 232 investigation, aimed at strengthening domestic supply security for critical minerals and reducing dependence on imports.
Despite building sizeable copper inventories, the US remains heavily dependent on imports due to limited domestic smelting capacity. US import dependence reportedly increased from 45% in 2024 to nearly 57% in 2025, while refined copper imports more than doubled y-o-y to 533,000 t in Q1 CY’26.
For the global market, tariff uncertainty is creating artificial tightness outside the US. More copper moving into American warehouses means reduced immediate availability in Europe and Asia, which could continue supporting international copper prices in the near term. However, elevated global inventories and softer manufacturing demand may limit sharp upside beyond speculative buying.
Going ahead, the copper market is expected to remain highly sensitive to developments surrounding US tariff implementation timelines, with any confirmation of phased duties likely to keep price volatility elevated. While headline exchange inventories remain elevated globally, regional availability outside the US has tightened due to accelerated flows into COMEX warehouses.
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