Citigroup predicts LME copper price to hit $10,000 before US tariffs

Citigroup expects LME copper to hit $10,000 per tonne in the next three months, as the global market remains tight until the timeline for US import tariffs becomes clearer.

Copper prices have risen in recent weeks after President Donald Trump signed an executive order initiating a Section 232 review of copper imports. These investigations assess the impact of imports on national security.

Meanwhile, major commodity traders such as Glencore (LSE: GLEN) and Trafigura are rushing to ship copper to the US ahead of a potential tariff announcement, aiming to maximize profits, Bloomberg reported.

The global benchmark price set on the London Metal Exchange closed at $9,770 per tonne on Wednesday, while futures in New York are already trading above $10,000 per tonne.

On Thursday morning, copper for May delivery was trading 0.6% higher at $4.87 per pound ($10,071 per tonne) on the Comex market in New York.

“We think ex-US physical market tightening is likely to persist through May/June, temporarily offsetting price headwinds from broader US tariff announcements,” Citigroup analysts including Max Layton wrote in an emailed note.

Citi’s outlook marks a shift from its February forecast, when the bank predicted copper would fall to $8,500 per tonne in the second quarter. However, Citi still expects a price pullback “once tariff-induced US copper import demand collapses, which we expect as Section 232 copper tariff implementation draws nearer.”

In addition, supply constraints persist. Chile, the world’s largest copper producer, saw its output decline 24% month-over-month in January, marking a nine-month low, while demand from smelters continues to grow.

Morgan Stanley also anticipates further gains in copper prices amid expectations of potential US tariffs.

“With tariffs not yet imposed, there is a strong incentive to send metal to the US, tightening markets in the rest of the world as well,” Morgan Stanley noted.

“Being long on a commodity in contango can be challenging, as the futures price ‘rolls down’ to the spot price. However, in backwardation, it can ‘roll up,’ and this shift can often drive investor inflows,” the bank added.

(With files from Bloomberg)