Copper Surges to All-Time High as Tariff Turmoil Rocks Market

(Bloomberg) -- Copper surged to its highest-ever price on the London Metal Exchange after a weeks-long rally fueled by anticipation that President Donald Trump will expand US tariffs to imports of refined metal.

Benchmark three-month futures on the LME gained as much as 0.8% to trade at $14,533 a ton, beating the previous record set in January.

The metal's 17% advance over the past year has been underpinned by a long-term mismatch in supply and demand. The world's ageing fleet of big mines is struggling to keep pace with usage from data centers, renewable energy and power grids — a backdrop trumpeted by copper bulls for years.

But shorter-term factors have come to the fore — especially the hundreds of thousands of tons shipped to the US this year by traders seeking to profit from higher prices there. The market is still pricing in the possibility of tariffs on primary copper imports, some two months after the Department of Commerce was due to issue a report to the White House advising on whether the levies are necessary.

While total global stockpiles are relatively high, they're now heavily concentrated in the US, as metal in the LME's sprawling global network has dwindled. That's sapped short-term availability, put pressure on holders of short positions and helped send prices to a record even in a tepid environment for demand.

Higher copper prices have been a major boon for the world's biggest miners, which have long touted their desire to get more exposure to a metal that's heading for a long demand boom. Rio Tinto Group, BHP Group, Glencore Plc and Zijin Mining Group Co. all posted big profit increases in their latest earnings reports, helped by the performance of their copper units.

Still, several major miners have been beset by operational challenges this year, with Chile's copper shipments sinking to the lowest in more than a year in August despite surging prices.

Copper was 0.7% higher at $14,513 a ton as of 4:15 p.m. local time on the LME.