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Copper prices surged over five percent in New York, outpacing global benchmarks, after U.S. President Donald Trump suggested imports of the metal could face a 25 percent tariff.
Trump’s remarks, made during a speech to Congress on Tuesday, triggered a sharp rally in Comex copper prices during Asian trading hours.
Traders reacted to the possibility that tariffs could be imposed sooner and at a higher rate than expected.
Read more: Copper prices hit two-week low amid US tariff concerns
Last week, Trump announced a Commerce Department investigation into copper imports on national security grounds, a move that could lead to new tariffs, according to a report by Mining.com.
The announcement had already widened the price gap between Comex copper and benchmarks in London and Shanghai.
Although the investigation could take months, Trump suggested on Tuesday that he had already enacted the 25 percent levy.
He previously signed an order imposing similar tariffs on aluminum and steel, set to take effect on March 12.
“A 25 percent tariff was clearly not what the market was expecting before those comments, and now traders are scrambling to price in the correct level, whatever that might end up being,” said Ole Hansen, head of Commodity Strategy at Saxo Bank AS. “The disruption to global trade flows is very real.”
The widening price gap has fueled a global rush to secure copper shipments before potential tariffs take effect.
With London Metal Exchange (LME) prices hovering around $9,500 per ton and New York prices trading about $1,000 higher, the arbitrage opportunity presents a significant profit margin in a market accustomed to tight spreads.
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