Copper Prices Soar in New York While Dropping in London—Similar to Gold Trends

• Copper prices have reached all-time peaks in New York due to concerns over tariffs and increasing demand.
• A banking professional from Bank of America stated that the copper market is experiencing a supply crisis.
• Increasing expenditures on defense alongside the growth in electric vehicle manufacturing are poised to affect both the consumption and availability of copper.

This year, gold has been hitting record levels above $3,000 per ounce — however, it isn’t the sole commodity experiencing strong interest.

Copper is utilized in products ranging from computers to electrical cables, and traders have been purchasing it rapidly amidst the threat of trade tariffs being imposed.

Demand has remained notably robust in New York, with copper reaching a peak on Wednesday of up to $5.374 per pound — exceeding $11,840 per metric ton.

This surpasses the $5.20 per pound recorded last May and marks almost a 30% increase since January.

Nevertheless, copper prices on the London Metal Exchange fell on Wednesday to a low of $9,893 per ton.

The same tariff fears have also pushed gold prices considerably higher in New York Than in London this year, with a scramble to transport gold bullion across the Atlantic to capitalize on the discrepancy.

Supply crisis

Michael Widmer, who leads metals research at Bank of America, informed Business Insider about similar stockpiling occurring in the U.S. involving copper, which has sparked a supply crisis.

Widmer mentioned that market participants are currently attempting to secure copper units for shipment to the US in preparation for potential tariffs.

There aren’t any additional copper units accessible in the current marketplace. More investments should be directed towards increasing supply; otherwise, I believe we’ll face a situation where demand exceeds availability due to insufficient supplies.

President Donald Trump's tariffs on imported copper could be implemented much earlier than anticipated, according to a report from Bloomberg on Wednesday.

Howard Lutnick, who served as the Commerce Secretary, was allotted up to 270 days To file a report assessing whether copper imports posed a threat to U.S. national security. The presidential directive stated that copper is essential for the nation’s economic stability and industrial durability due to its “crucial function in defense systems, infrastructure development, and innovative technologies.”

A lot of people anticipate that Trump will unveil new tariffs as early as the coming week.

This month, analysts from Goldman Sachs predicted that a minimum tariff of 25% would likely be applied to imported copper as well as numerous other types of metal.

In a note from last weekend, they stayed "strategically wary" regarding the metal, stating further: "A concentration on China or an aggressive stance on reciprocal tariffs would likely have adverse effects on copper prices."

Rising defense budgets

Plans by European countries to boost their defense budgets due to uncertainties regarding the US pledge to NATO may also influence copper supplies and pricing.

In February, UK Prime Minister Keir Starmer announced that Britain would increase its defense expenditure to 2.3% of GDP. 2.5% by 2027 Last week, Germany's legislative body approved a measure allowing for unprecedented expenditures on both defense and infrastructure projects.

"I think between 2009 and 2030 we can effectively justify a doubling of copper demand from the defense industry," Widmer said.

Building electric vehicles and data centers were also copper-intensive activities. "So we basically just keep adding on the demand side," he said.

Goldman predicts a worldwide shortfall of copper amounting to 180,000 tons for this year because of reasons such as increased electrification and diminishing output from mining operations.

According to the International Copper Association, global demand is projected to increase by an annual rate of 1.85%, climbing from 28.3 million tons in 2020 to approximately 40.9 million tons by 2040.

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