(March 25): Copper futures on New York’s Comex exchange surged to an all-time high as traders price in the possibility that US President Donald Trump will impose hefty import tariffs on the crucial industrial metal.

Comex copper futures rose to US$5.2055 (RM23.11) a pound as of 9.56am Tuesday, surpassing the previous record of US$5.199 set on May 20. The front-month contract has jumped around 29% this year, creating an unprecedented disconnect between US prices and the global benchmark set on the London Metal Exchange.

US copper futures started surging above prices on the LME in January, and the gap reached record levels after Trump last month ordered the US Commerce Department to conduct a probe into possible copper tariffs on national security grounds. On Monday, the gap between front-month Comex and LME prices reached new all-time highs of more than US$1,400 a ton.

That’s creating huge incentives for traders who’ve been exploiting the price differential to shift copper into the US to front-run any potential tariffs. Goldman Sachs Group Inc and Citigroup Inc anticipate the US will impose 25% import levies on copper by year end, and traders expect a massive amount of copper will arrive in the US before then.

Kostas Bintas, Mercuria’s head of metals trading, estimates that about 500,000 tons of copper are heading to the US, leaving the rest of the global market perilously short of the metal. He predicts that prices on the LME could jump to more than US$12,000 a ton, up from about US$10,000 currently, as the shortage worsens.

And while traders and investors are expected to reap profits from moving copper around, US manufacturers are paying costs that price in a substantial part of the expected impact should the hinted-at 25% levy come into effect.

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