LME three-month copper traded at $13,566/t on June 17, down 0.36% on macro concerns but propped up by expectations around the June 30 tariff review. The Section 232 review deadline creates the highest uncertainty since the process started, per Reuters.
The U.S. Commerce Secretary must deliver an updated assessment by end-June. This sets up a proposed 15% tariff on refined copper from 2027, rising to 30% from 2028. Traders are front-loading: U.S. refined copper imports doubled year-on-year in Q1 to 533,000 tons, Bloomberg reports.
The two-tier market is widening. Near-month COMEX futures trade at a premium above $500/t over LME spot. That spread pulls metal out of LME warehouses into CME-deliverable stocks. LME copper inventories have declined every day since May 28.
Citi turned bullish on June 1, forecasting $14,500/t within a month and $15,000/t within a year, citing tariff uncertainty and demand from electrification and data centers. Goldman Sachs raised its year-end target to $13,735/t from $12,465/t.
The bear case: higher energy prices from the Middle East conflict and a stronger dollar after U.S. jobs data raised the odds of a Fed rate hike. Chinese demand is soft, with some analysts describing a 'China buyers strike.'
Two scenarios before June 30. If tariffs come in, COMEX premiums widen and U.S. imports get more expensive. If shelved, the arbitrage unwinds and LME prices correct. Best move: hedge Q3 price exposure now and diversify regional sourcing.