Copper reached record levels on the London Metal Exchange, with prices above USD 14,000 per tonne, while the LME base metals index also set a new record this week despite higher energy prices. Demand linked to the energy transition and data centres was cited as a supporting factor, alongside concerns about tight copper ore supply.
The US Department of Commerce is expected to decide by the end of June whether to extend existing tariffs to refined copper. A proposal set out a 15% tariff from 1 January 2027, rising to 30% a year later.
US imports of copper nearly doubled last year, linked to stockpiling ahead of possible tariffs. Since mid-April, COMEX inventories have started rising again, tightening supply outside the US.
Chinese production data due next week is expected to be closely watched. The article was created using an AI tool and reviewed by an editor.
Looking back at the analysis from 2025, the situation we anticipated is now playing out as the US tariffs on refined copper are set to begin in just over six months. The stockpiling trend we saw beginning has significantly drained available supply outside of the United States. This fundamental tightness underpins the current market strength.
The supply situation has become critical, with London Metal Exchange inventories recently falling below 55,000 tonnes, a level not seen since 2008. This validates the concerns from last year that COMEX stockpiling would tighten the global market. With prices currently hovering near $13,800 per ton, the market is extremely sensitive to any new supply disruptions.
On the demand side, the story has only grown stronger, propelled by the relentless build-out of AI data centers and the accelerating EV transition. Recent data shows global EV sales in the first quarter of 2026 were up 22% year-over-year, and April’s stronger-than-expected manufacturing PMI from China points to continued robust industrial demand. This confirms that the structural drivers we identified remain firmly in place.
Given this bullish setup of tight supply and strong demand, we should consider buying call options to capitalize on further price increases in the coming weeks. Focusing on contracts expiring in the third quarter of 2026 allows time for the supply squeeze to intensify as the tariff deadline nears. Bull call spreads could also be an effective strategy to manage costs in this high-volatility environment.
We must continue to monitor weekly inventory reports from both the LME and COMEX for any unexpected shifts in stockpiling behavior. Additionally, any signs of a slowdown in Chinese industrial activity could provide a temporary headwind. However, the primary trend remains upward as the market braces for the 2027 tariffs.
