COMEX copper futures held near the $6.34/lb mark in June 21 trading, with volumes moderate ahead of the weekly Commitments of Traders report. The US dollar index edged lower by 0.2%, providing limited support to dollar-denominated metals. Managed money net long positions in COMEX copper are at 12,500 contracts, down from 18,000 in early May.
US industrial production rose 0.3% month-on-month in May, according to the Federal Reserve, but manufacturing output was flat as construction supply and automotive production softened. Electrical equipment and appliance manufacturing, a key copper demand segment, grew 0.6%. The housing market showed stabilization with May housing starts at 1.28 million annualized, up from 1.24 million in April.
Copper import premiums into the US Gulf Coast stand at 4.5 cents per pound over COMEX, down from 5.2 cents in April, indicating adequate spot availability. US copper cathode production by Freeport-McMoRan and Rio Tinto's Kennecott operation remains steady.
A potential catalyst: US tariff policy on copper imports. The Department of Commerce is reviewing Section 232 national security implications of copper imports. Any tariff of 10% or more would create a US market premium and pull LME-linked material into the US, tightening global availability.
US copper buyers should expect the COMEX-LME spread to widen if Section 232 tariffs materialize. Current import premiums of 4.5 c/lb leave room for domestic procurement at competitive rates. For Q4 delivery, consider locking in COMEX pricing below $6.30/lb if the dollar strengthens. Monitor managed money positioning — a drop below 10,000 net long contracts historically precedes a 5-7% correction.