Copper futures in the US rose toward $5.1 per pound on Tuesday, the highest in three months, as tight supply in key exchanges magnified the impact that a weak dollar. The risk of tariffs on copper by US President Trump drove traders to move metal between exchanges and trigger supply squeezes in key storage centers.
The US maintained its probe against copper imports to prelude eventual tariffs, squeezing foreign supply and maintaining the pressure on limited smelting and processing capacity. Traders moved copper out of LME warehouses and triggered an aggressive backwardation in the futures curve, driving on-warrant inventory to plunge 80% this year tom/next spreads to $40 per tonne. In the meantime, softer concerns of reciprocal tariffs by the US, lower geopolitical tension in the Middle East, expectations of stimulus by the Chinese government and monetary easing by the Federal Reserve all contributed to a softer dollar and an improved outlook for global manufacturing demand.
