U.S. Copper tariffs cause relocation of metal

U.S. President Donald Trump’s threatened tariff on copper imports has generated a mass relocation of physical metal, swamping the U.S. market and draining the rest of the world.

The physical response has been so powerful that it has caused the futures arbitrage between the CME contract and the London Metal Exchange (LME) price to collapse.

CME copper inventory has risen by 81% since the start of the year and is now at an eight-year high of 168,563 short tons (152,919 metric tons).

LME copper inventory has slumped to a one-year low of 179,375 tons, with 40% of what remains awaiting physical load-out.

China’s imports of refined copper fell 5% on a year-over-year basis and 20% on a quarter-over-quarter basis in the January-March period as metal was diverted to the U.S.

Source – Reuters