Wide arbitrage fuels uncertainty
Global copper markets have faced unusual volatility in 2025, with New York-based analyst John Gross describing conditions as “dazed and confused.” In his August 15 edition of The Copper Journal, Gross highlighted the sharp swings in price differentials between Comex and the London Metal Exchange (LME). While Comex copper ended 2024 about 6 cents per pound above LME prices and sits at a similar gap in mid-August 2025, the first half of the year saw far greater divergence.
Tariff fears triggered sharp surge
From January through July, Comex copper soared as traders braced for a possible U.S. import tariff on copper under President Donald Trump’s trade policy. Prices at one point reached more than $1 per pound above LME copper, one of the largest arbitrage spreads in exchange history. The surge proved temporary. In late July, the White House confirmed tariffs would not include copper cathode, sending the spread back to typical levels.
Inventory shifts reshape supply flows
The arbitrage led to dramatic shifts in warehouse stockpiles. According to Gross, Comex inventories climbed nearly 158,000 metric tons this year, although that remains small compared with U.S. imports. Between January and June, the U.S. imported 940,000 metric tons of copper cathodes, sharply higher than the 540,000 tons recorded in all of 2024. These inflows reflect how tariff speculation redirected global supply chains toward U.S. markets.
Trading activity rises on LME
The price swings also boosted trading volumes. The LME reported 167,501 lots of copper traded in July, a 5.2% increase from a year earlier. In total, more than 635,000 metric tons of copper contracts were traded on the LME between January and July 2025, up 2.2% from the same period in 2024. Copper was the second most heavily traded metal on the exchange, trailing only aluminium, which surpassed 1 billion metric tons of contract activity.
