Amid uncertainties over U.S tariff policy, copper prices on COMEX likely to hold premium over London Metal Exchange —Analyst

Copper prices on the United States COMEX exchange are expected to maintain a premium over the London Metal Exchange (LME) for at least the next 18 months amid ongoing uncertainty over U.S. tariff policy, LME Head of Market Development Robin Martin reportedly said this week.

“There is a persistent premium on the CME contract of two or three percent, and I do think it is fair to say this is likely now a structural difference in the markets that is likely to persist,” Martin told delegates at the World Copper Conference Asia.

According to Mining.com, the widening gap between CME and LME copper prices—driven largely by U.S. tariffs—had contributed to a drawdown in LME inventories as copper stocks migrate into COMEX warehouses.

U.S. copper exchange inventories surpassed 400,000 short tons for the first time last Monday.

Martin said the LME was working to improve accessibility for Chinese users, noting progress toward accepting offshore yuan as collateral and efforts with major Chinese banks to streamline processes.

The exchange is also considering including Chinese government bonds as eligible clearinghouse collateral.

Meanwhile, Access Bank Group said in a market note that copper prices slipped on Thursday during thin LME trading, as renewed credit strains in China’s property sector deepened concerns about demand in the world’s largest metals consumer.

The demand worries overshadowed an otherwise bullish supply-driven outlook.

Copper prices have risen nearly 25 percent this year due to significant mine disruptions and tariff-related trade distortions.

However, signs of weakening domestic demand in China are becoming more apparent, participants at the conference said.

Commodity trader Trafigura noted that China’s copper demand growth since 2020 has been driven entirely by export-oriented manufacturing.

“Sentiment deteriorated further after reports that embattled developer China Vanke was denied short-term loans by major banks, fuelling fears of broader property-sector instability,” the report said.

WARNING! All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express permission from ZAMBIA MONITOR.