Copper slips below $14,000 as tariff fears rattle the market

Copper prices have pulled back from recent highs, slipping below $14,000 per tonne on the London Metal Exchange as geopolitical uncertainty in the Middle East and macroeconomic concerns weigh on sentiment. ‘

While structural demand drivers remain supportive, near-term risks from potential US tariffs and shifting inventory patterns are creating a complex trading environment for the red metal.

The three-month copper contract on the London Metal Exchange was last at $13,731.58 a ton, down 0.5% from the previous close, as per data from commodity trading platforms.

Recent price action and market pressures

Base metals, including copper and aluminum, extended their retreat this week amid ongoing Middle East tensions and a pullback in technology stocks.

Despite earlier gains fueled by supply concerns and tariff expectations, copper has given up some of its recent momentum as traders reassess demand risks from higher energy costs and slower global growth.

Ewa Manthey, commodities strategist at ING Economics, highlighted the mixed signals emanating from the copper market at present.  

US tariff decision creates nervousness

Market attention is now firmly focused on an upcoming decision by the US Department of Commerce regarding the possible extension of import tariffs to refined copper.

Thu Lan Nguyen, Head of FX and Commodity Research at Commerzbank AG, noted rising anxiety in the market.

“Nervousness in the copper market is on the rise again. The US Commerce Secretary is expected to decide at the end of this month on extending US import tariffs to refined copper,” Nguyen said.

Last year, speculation around tariffs led to pre-emptive inventory building in the US, which tightened supply elsewhere.

While initial tariffs targeted semi-finished products, the Department of Commerce has proposed gradually extending duties to refined copper from 2027. 

The final decision, expected in the coming weeks, could trigger significant volatility.

Diverging inventory trends

The contrasting movements between COMEX (rising) and LME (declining) inventories reflect ongoing trade distortions caused by tariff expectations. 

US copper production has shown limited recovery despite earlier tariffs, suggesting that any extension could accelerate pre-emptive stocking in the United States and further tighten availability elsewhere.

This dynamic is playing out against a backdrop of strong structural demand for copper driven by global electrification, renewable energy expansion, and data center growth. 

However, near-term headwinds from geopolitical risks and potential economic slowdowns are keeping prices in check.

Geopolitical and macro risks

Uncertainty surrounding the Iran conflict continues to influence sentiment across commodities. 

While a recent Israel-Lebanon ceasefire agreement offered some hope, broader regional tensions remain unresolved, affecting investor risk appetite.

Higher energy prices stemming from Middle East disruptions are also raising input costs for copper mining and processing, while contributing to broader inflationary pressures that could delay monetary easing in major economies.

Medium-term outlook

Fundamentals for copper remain broadly constructive. Manthey pointed to supportive factors including “tariff-driven trade distortions and structural demand linked to electrification and grid investment.” 

Yet she cautioned that “the near-term price direction is likely to remain sensitive to macro risks, with uncertainty in the Middle East acting as a headwind.”

Analysts expect increased volatility in the second half of 2026 if the US proceeds with refined copper tariffs.

Stronger US imports could widen the price spread between US and international markets, creating arbitrage opportunities but also logistical challenges.

Investment and policy implications

For investors, copper continues to offer exposure to the global energy transition, but tactical positioning will be crucial amid tariff uncertainty and geopolitical swings. 

Mining companies may benefit from higher prices in a supply-constrained environment, while downstream manufacturers face margin pressure.

Policymakers in the US and Europe are balancing efforts to secure critical mineral supplies with domestic industry protection.

Any escalation in trade measures could accelerate supply chain shifts and encourage faster adoption of recycling and alternative materials.

Overall, the copper market is entering a period of heightened sensitivity.

While long-term demand from green technologies and AI infrastructure supports a bullish structural case, near-term developments around US tariffs, Middle East stability, and global growth will dictate price direction in the coming months.

Traders and consumers alike are bracing for potential sharp moves as the US tariff decision approaches and summer demand patterns evolve.

The coming weeks could prove decisive in setting the tone for copper through the remainder of 2026 and into 2027.