Copper prices smashed through the previous all-time high on Tuesday, with the September Comex contract touching $6.7045 per pound. The red metal has climbed roughly 17% in 2026 and more than 50% over the past 12 months, driven by a potent mix of tariff speculation and physical supply constraints.
Tariff arbitrage drives premium
The rally has a distinctly American flavor. New York copper traded about $640 per tonne above London on Tuesday — nearly double July's average premium of $350. The gap reflects President Trump's pending decision on refined copper import tariffs, which would start at 15% in January 2027 and rise to 30% a year later.
“The tariff arbitrage is ruling the roost over demand growth,” said Michael Cuoco of StoneX Financial. The premium has pulled a flood of metal into the country: over 200,000 tonnes of copper arrived at US ports in July, the largest monthly inflow since records began in 2014.
The tariff threat isn't new, but the market is pricing in the risk now. In July 2025, a 50% tariff exemption on refined metal caused Comex prices to collapse 20% in a single day. Traders are betting the current proposal won't be watered down.
Supply chain strains from acid to mine
Behind the tariff story lies a tightening physical market. The London Metal Exchange cash contract commands a premium of more than $100 over three-month metal — the widest backwardation since January. That structure signals immediate scarcity, not speculative froth.
Two unrelated supply shocks have compounded the squeeze. The Strait of Hormuz closure in late February cut around half of seaborne sulphur exports. Then China banned acid exports in April, removing roughly a quarter of global sulphuric acid supply. That matters because solvent extraction and electrowinning (SX-EW) — which produces more than 15% of the world's copper cathode — relies on sulphuric acid. Operations in Chile and the Democratic Republic of Congo reportedly hold only 30 to 60 days of acid inventory.
On the mine side, Codelco paused the expansion of its El Teniente mine after detecting new seismic risks. The state-owned giant's struggles have already constrained output from the world's top copper-producing country.
LME copper touched $14,050 per tonne this week, close to January's record of $14,500. Goldman Sachs raised its end-2026 target to $13,735 per tonne; Citi sees $15,000 within a year.
What the charts say
The daily chart shows copper breaking out of the $6.60 resistance zone, with support near $6.00. An ascending trendline projects a target of $6.85. The daily relative strength index is overbought near 70, but previous overbought readings in December 2025 and May 2026 led to consolidation, not reversal.
A close below $6.60 would delay the bullish setup. A loss of $6.00 would invalidate it entirely.
