Why is June 30 important for Copper?

• LME on-warrant copper inventories declined as traders anticipated potential U.S. tariffs.
• June-end tariff decision may trigger volatility, tightening inventories and copper spreads.

Metal Intelligence Centre: LME copper on-warrant inventories, those not marked for withdrawal, have fallen sharply in recent weeks as traders prepared to move stocks to U.S. warehouses in case of an announcement of a potential U.S. tariff.

LME on-warrant stocks are currently just above 200,000 mt and are close to levels seen in February 2025, when similar concerns about U.S. tariffs triggered a series of withdrawal requests.

U.S. Copper Tariff

In February 2025, the U.S. hinted at imposing tariffs on copper imports. This triggered a rush to import and stockpile copper ahead of the tariff deadline, pushing U.S. warehouse stocks sharply higher while LME inventories tightened.

The U.S. announced a 50% tariff on imports of semi-finished copper products and copper-intensive derivatives, effective August 1, 2025. This excluded imports of refined copper, the largest imported form of copper.

In 2024, the U.S. imported 9,26,129  mt of copper and copper products; 51% of this was refined copper.

The U.S. President further ordered a review, to be completed by June 30, 2026, to determine whether tariffs on refined copper would be required for national security reasons.

Backwardation

In 2025, when LME on-warrant inventories fell below 130,000 mt, spreads flipped into backwardation. Cash-3m spreads flared up to 393 by June 23, 2025.

Currently, LME’s cash–3m spread is narrowing (reducing contango) in line with falling on-warrant inventories. Yet, they are not in backwardation.

What matters this week?

In June, CME copper traded as high as $600-650/mt above LME prices in anticipation of a tariff announcement before June 30. With no announcement so far, the final week of June has become critical for traders.

If the U.S. does not announce a new tariff measure by the deadline, copper inventories at LME warehouses that were earmarked for movement to the U.S. could be returned to LME warehouses (called re-warranting). This may diminish concerns about shortages and thereby ease spreads (widen contango).

On the other hand, any tariff announcement could prompt further withdrawals from LME warehouses, pushing inventories lower and increasing the risk of backwardation and volatility in the copper complex. It is expected that any new tariff, if announced, would be effective from January 1, 2027.

Conclusion

The recent rally in copper prices and inventory withdrawals from LME warehouses reflect heightened positioning by futures and physical market traders in anticipation of a U.S. tariff announcement by or before June 30. This makes the final week of June particularly important. Changes in prices, spreads, and stocks will be determined by the U.S. announcement, if any.

Note: This article has been published as part of a content partnership between MIC and BigMint.