Copper traders get deja vu as Comex arbitrage reopens

Copper traders are facing a once-familiar situation as prices on the Comex exchange exceed the London Metal Exchange global benchmark, opening an arbitrage that incentivizes shipments to the US bourse for the first time in months.

The re-opening of the so-called Comex arbitrage – a defining feature of the copper market in 2025 – has mystified some traders, but comes ahead of an expected update on potential US tariffs on refined copper in June, which could make it much more expensive to import the metal into the United States.

The most active Comex copper futures were trading at a premium of $110 per metric ton over the LME benchmark at the end of last week.

The open arb will result in more copper from South America, in particular, making the relatively short journey to the US, three copper trading sources said on the sidelines of an industry gathering in Chilean capital Santiago.

Two of the sources said the South American premium – paid on top of LME prices for physical copper supplies – had risen to just under $200 a metric ton now, from $0-$50 a week ago, as interest in sending metal to the US returns.

The sources declined to be named as they were not authorized to speak to media.

Commerce update

Last year, with the Comex arb wide open, traders rushed to move hundreds of thousands of tons of refined metal into the United States ahead of possible import tariffs.

Refined copper was ultimately given an exemption – and LME copper has mostly been trading above Comex in 2026 – but the prospect of a US tariff has not gone away, with a recent White House statement bringing the issue back to the fore.

US Commerce Secretary Howard Lutnick is due to update President Donald Trump on domestic copper markets and tariff proposals by the end of June.

Comex copper “has moved back into a premium to the LME as we get closer to the expected June report by the US Commerce Secretary regarding import tariffs on refined copper,” Anant Jatia at Greenland Investment Management, a hedge fund specializing in commodity arbitrage trading, told Reuters.

“Holding US copper prior to the report gives traders upside optionality in the event that tariffs are imposed.”

There are currently 532,070 metric tons of copper in Comex warehouses after the massive inflows in 2025.

“Comex copper is still sitting on highly elevated inventory levels,” Jatia said. “In a no-tariff scenario, we expect the premium to rapidly flip and trigger a supply glut of copper out from the Comex to LME.”

(By Tom Daly and Polina Devitt; Editing by Nia Williams)