What International Copper Prices Tell us About the Market

For most of this year, copper prices have pretty much been dislocated. If you look at the US, it was commanding a significant premium to prices over LME traded copper. LME traded copper tends to be that international benchmark price.

What we saw was an arbitrage trade where people were able to buy copper overseas, and they were looking to ship that into the United States ahead of any expected tariffs. After the proclamation of the tariffs went public about a week and a half ago, what we saw was that the US prices collapsed much closer to be in line with LME copper. They went from over 30% premium down to a 1% pretty much within a few hours.

In recent months, what we saw was a lot of copper was being directed to the United States ahead of these tariffs, and that caused US inventories to reach their highest point in 21 years. At the same time, we saw people drawing down LME copper inventories. They were off about 50%. But since these tariffs have been announced, we've actually started to see those LME stock piles increasing again. So, we're starting to see some more of that balance come back to the market.