Copper Price Slips as Tariff Reversal Sparks Surge in LME Stockpiles

Tariff U-Turn Drives Copper Back Into Global Warehouses

Copper prices declined this week following a sharp increase in LME copper stockpiles, driven by shifts in global trade flows. Inventories jumped by 14,350 tons to 141,850 tons, the highest level since March. This sudden influx comes after traders began unwinding large shipments initially sent to the U.S. under the assumption of higher tariffs.

The move followed former President Trump’s decision to exclude refined copper from a proposed 50% tariff. U.S. prices quickly dropped, prompting re-exportation of stockpiled copper. Much of this metal is now heading into LME warehouses, particularly in South Korea and Taiwan, as traders race to find new storage amid falling demand in North America.

Meanwhile, the oversupply narrative has overshadowed supply risks from Codelco’s El Teniente mine in Chile, where operations remain halted following a deadly tunnel collapse caused by an earthquake. Despite the tragedy, market participants expect production to resume soon, muting its effect on current pricing.

El Teniente Shutdown Adds Uncertainty but Fails to Lift Copper Price

The recent earthquake at Codelco’s El Teniente, one of the world’s largest underground copper mines, claimed six lives and forced a temporary halt in operations. The mine contributed 356,000 tons of copper in 2024—more than China’s monthly refined copper imports. While the incident raises potential supply concerns, the broader market has focused on global stock dynamics rather than output disruptions.

Analysts like Ed Meir of Marex Capital Markets noted that “expectation is that production will resume shortly,” which has kept price reactions muted. The copper price dipped 0.5% to $9,638.50/ton, despite the Chilean setback. Other base metals showed mixed results, with zinc edging up 0.3% and nickel slipping by the same margin.

This disconnect between supply risks and pricing highlights how sensitive the copper market remains to global trade policy. With the unwinding of U.S.-centric trading strategies, attention is returning to LME activity and stock movement as key price indicators.

SuperMetalPrice Commentary:

The decline in copper price despite significant supply disruptions underlines the dominance of macroeconomic and geopolitical drivers. The reversal of tariff policies has forced traders to reallocate massive copper volumes, revealing the fragility of short-term pricing mechanisms. LME stockpiles now act as a pressure valve, absorbing excess supply while masking potential disruptions like those at El Teniente. If Codelco’s stoppage extends or tariffs shift again, copper’s floor could quickly rise. For now, however, global warehousing capacity and trade flows remain the dominant forces shaping price direction.