US Copper Import Premiums Collapse as Tariff Plans Reportedly Stall

The premium for delivering copper to the United States plummeted on Thursday following reports that Washington's plans to impose a significant tariff on imports of the industrial metal have stalled. The policy hesitation has sent shockwaves through the copper market, reversing a pricing anomaly that had persisted for months.

Prices Retreat from Record Highs

Global copper prices fell sharply on the news. The benchmark copper contract on the London Metal Exchange (LME) dropped 3% to $14,329.50 a metric ton as of 11:20 GMT, retreating from a record high of $14,875 hit earlier in the session.

In the U.S., the COMEX copper contract saw a steeper decline, falling 4.7% to $6.49 a pound, equivalent to $14,308 a ton. The sell-off reflects an unwinding of speculative positions built in anticipation of the import duty.

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Arbitrage Trade Unwinds

The White House is reportedly reconsidering the tariff over concerns that it could inflate costs for domestic manufacturers, potentially outweighing the intended benefits for U.S. mining operations. For months, traders had been shipping copper to the U.S. to build inventories ahead of a possible 15% tariff expected to take effect at the start of 2027.

This activity, which began after an investigation into copper imports was ordered in February of last year, created a significant premium for COMEX prices over the LME benchmark. On Thursday, that spread collapsed dramatically. The front-month COMEX-LME spread for October delivery fell by around $200 a ton, turning negative to last trade at minus $20 a ton. A negative spread makes it uneconomical to ship metal to the U.S., effectively closing the arbitrage window.