US copper futures on the Comex exchange climbed to a record high of $5.2255 per pound on Tuesday, eclipsing the previous peak of $5.199 set in May. The rally reflected a mix of market forces and fresh supply concerns that together pushed traders to bid prices higher.
Two developments were central to the advance. First, market participants reacted to reports that the US government is considering substantial import tariffs on copper, a move that would materially change trade flows and domestic demand. Second, a report said that Glencore temporarily halted shipments from its Altonorte smelter in Chile after furnace issues, tightening available supply and adding immediate physical-market pressure.
The front-month Comex contract has surged roughly 29% so far in 2024, a dramatic run that has produced an unusually large divergence between US domestic prices and the London Metal Exchange (LME) global benchmark. That disconnect began to widen in January and accelerated after the White House ordered a national security review of potential copper tariffs. By Monday, the gap exceeded $1,400 per metric ton, a record differential between the two price references.
Market analysts say the tariff uncertainty is a key driver keeping the split between Comex and LME prices elevated. Matt Schwab of Quantix Commodities noted that unclear timing and scope around any tariff implementation is likely to maintain elevated premiums in the US market as traders and consumers factor in potential protectionist measures. When tariff risk affects expectations for imports, domestic buyers may pay more for nearby contracts, while the global benchmark reflects broader international supply and demand dynamics.
Supply-side disruptions also played a role in the recent price action. Glencore’s temporary suspension at Altonorte highlighted how operational issues at major smelters can quickly affect market sentiment. Even short-term reductions in shipments can tighten nearby availability, prompting traders to push front-month futures higher to secure material for imminent delivery or inventory build-up.
These combined influences—policy-related tariff speculation and tangible supply interruptions—help explain why Comex futures outpaced LME prices so sharply this year. Traders watch both sets of prices closely because each offers different signals: the LME often reflects global flows and longer-term balances, while Comex can respond more rapidly to US-specific developments, including trade policy shifts and domestic logistical constraints.
Looking ahead, the most important factors to monitor will be the outcome of the national security review, any official tariff announcements, and whether additional supply disruptions occur at major copper producers and smelters. If tariffs are implemented or if further operational issues reduce exports from key producing regions, the premium on US futures relative to the LME could persist or widen. Conversely, a clear decision against tariffs or a swift resolution of smelter disruptions could narrow the gap as risk premia subside.
For market participants, the current environment reinforces the need to consider both policy risk and near-term physical market conditions when making hedging and procurement decisions. The unprecedented price divergence this year underscores how quickly fundamentals and geopolitical considerations can alter price relationships between regional and global metal markets.