Key insights
- Morgan Stanley identifies potential US copper import tariffs (15% in 2027, 30% in 2028) as a key risk. The decision, due by July 1, could significantly impact COMEX vs. LME pricing. Over-importation has already occurred, with US inventories high. Tariffs would likely tighten ex-US supply and boost global prices, while no tariffs could weigh on benchmarks. Current market pricing suggests a moderate chance of tariffs, with COMEX net longs at record highs.
Investing.com -- Morgan Stanley analysts highlighted the upcoming US decision on refined copper import tariffs as a significant risk event for copper markets. The US must decide by June 30 or July 1 whether to implement a 15% refined copper import tariff starting January 1, 2027, which could rise to 30% in 2028.
The COMEX copper price, a US-delivered benchmark, could trade approximately 15% higher than the London Metal Exchange benchmark if tariffs are announced. COMEX is already trading about 6% higher than LME, encouraging market participants to ship copper to the US ahead of potential implementation.
Morgan Stanley estimated that the US has over-imported 260,000 metric tons of copper year-to-date, representing 2.6% of global demand when annualized. The US now holds more than one year of normal refined copper imports in inventory.
A 50% import tariff is already in place for aluminum, steel, and most imports of semi-finished copper products. The June 1 White House fact sheet noted recent developments in steel, aluminum, and copper output in the US.
Morgan Stanley outlined three possible outcomes. If tariffs are announced with advance notice, the bank expects accelerated copper flows into the US, tightening ex-US markets and driving both COMEX and LME copper prices higher. If tariffs are ruled out, the excess US importing would likely cease, weighing on both benchmarks. If the decision is delayed, this would continue the current situation but could be modestly negative for copper prices.
The market is currently pricing around a 43% chance of a 15% tariff being in place by January 2027. COMEX net long positioning is already at an all-time high, Morgan Stanley said.