US Refined Copper Tariff Decision Delayed, COMEX-LME Spread Briefly Turns Negative

en.Wedoany.com Reported - On September 10, no final decision had been made on the US refined copper tariff policy. The US government is assessing the impact that imposing tariffs could have on driving up manufacturing costs. After the news was released, the premium of US COMEX copper prices relative to the London Metal Exchange (LME) narrowed rapidly. The COMEX-LME copper spread for October delivery briefly fell by about $200/tonne during intraday trading and turned negative, later quoted at about negative $20/tonne. At this spread level, shipping copper to the United States for cross-market arbitrage no longer has any price margin.

On the same day, the LME benchmark copper price briefly hit a record high of $14,875/tonne, then fell about 3% to $14,329.50/tonne; COMEX copper prices fell about 4.7% over the same period to $6.49/lb, equivalent to about $14,308/tonne. For several months prior, COMEX copper prices had consistently been higher than LME prices, with one of the main trading logics being market expectations that the United States might impose a 15% tariff on refined copper starting in 2027, prompting traders and producers to continue shipping refined copper to the United States.

The US tariff arrangement for refined copper remains under review. In 2025, the United States launched a Section 232 investigation into copper imports, and by June 30, 2026, the Department of Commerce had submitted to the President, as required, an analysis of the US copper market, domestic smelting capacity, and refined copper supply conditions. Previous policy documents proposed that, based on the review results, a 15% tariff on refined copper could be assessed starting January 1, 2027, increasing to 30% in 2028, but as of September 10, no final decision had been reached.

Unlike refined copper, the United States has already imposed Section 232 tariffs on most copper semi-finished products and some copper-intensive derivative products. Starting April 6, 2026, the additional tariff applicable to copper products was changed to be calculated on the full customs value of imported goods; starting June 8, the United States again adjusted the tariff regime for steel, aluminum, and copper-related products. Refined copper cathode remains the main product for which the market is awaiting a final policy decision.

Tariff expectations have already changed the structure of US copper inventories. As copper continued to flow into the United States, COMEX inventories rose to a record level of 696,259 tonnes. After the change in policy expectations on September 10, the spread between LME cash and three-month copper also adjusted, with cash returning to a discount relative to the three-month contract, indicating a change in the degree of short-term supply tightness previously formed around the United States absorbing large amounts of physical copper.