London copper futures climbed to a record high Friday, reflecting growing anxieties over global supply and the potential impact of shifting trade policies. the critical industrial metal, essential for everything from electric vehicles to power grids, is facing increased pressure from production challenges in major mining regions and uncertainty surrounding future tariffs. The surge comes as the Biden administration weighs the future of copper tariffs, with a key report for former President Trump due next year that could reimpose duties [[1]].
Copper prices surged to a new record high in London, fueled by ongoing concerns about potential future supply disruptions of the critical metal, which is widely used in technology and the energy transition.
Supply chain issues at major mines in Asia and Chile – including the recent tragedy at El Teniente – have contributed to the tightening market. Adding to the anxiety are emerging fears of potential new tariffs, raising the specter of a global supply crisis.
According to Bloomberg, copper rose nearly 0.9% to US$11,294.5 per ton on the London Metal Exchange, surpassing a previous high reached on Friday. Futures on the Comex exchange advanced by as much as 1.6% across the Atlantic.
Copper Hits Highs Amid Global Supply Concerns
The price of the metal, often referred to as “Chile’s salary” due to the country’s significant role in its production, has risen sharply following signals of a potential supply shortage revealed at a recent copper conference in Shanghai. This surge reflects the metal’s importance in key sectors like electrification, alongside materials like lithium and rare earth elements.
Felipe Sepúlveda Soto, Chief Analyst at Admirals, stated in his morning dollar analysis that the copper advance “is explained by a tighter supply (lower production in Chile and scheduled cuts in Chinese smelters) and by high premiums in the US, which historically improves Chile’s terms of trade and tends to strengthen the peso.”
Bloomberg also reports a “rush to get copper to the United States,” driven by a desire to preempt potential tariffs, which could exacerbate deficits in certain regions and further pressure miners.
In late June, the White House announced that exports of refined copper – such as that exported by Chile – to the United States would be exempt from a 50% tariff and reciprocal tariffs, including copper minerals, concentrates, matte, cathodes, anodes, and copper scrap. However, semi-finished copper products will still be subject to these taxes.
While this provided some relief to the Chilean government and mining industry, the official statement stipulated that the Secretary of Commerce will deliver a report to Donald Trump on the copper market and refining capacity by June 30, 2026.
Should he deem it necessary, Trump could impose a tariff on refined copper starting January 1, 2027, beginning at 15% and escalating to 30% in January 2028. Copper has also been designated a “critical mineral” by the U.S., alongside 15 rare earth elements. This designation underscores the strategic importance of securing a stable supply of the metal for the U.S. economy.
