High-grade copper futures in New York surged on Tuesday, reaching a fresh record high of USD 5.8955/lb, after President Trump, during a cabinet meeting, stated he was considering a 50% tariff on copper imports—well above the 25% anticipated by the market. The remark reignited tensions around the ongoing Section 232 investigation into copper, which for months has fueled a widening price dislocation. New York futures have consistently traded at a premium to London and Shanghai in anticipation of tariffs similar to those already imposed on steel and aluminum.
The U.S., like China and other major economies, is facing a rapidly rising demand for electricity—driven by the electrification of transport, industrial reshoring, and especially the explosive growth of AI and hyperscale data centers. To meet this surge, the U.S. is not only expanding renewables but also reopening nuclear plants to ensure grid reliability. Constellation Energy, the largest U.S. nuclear operator, projects national electricity demand to grow at twice the pace through 2030 compared to the last decade, propelled by:
- AI and hyperscale data centers
- EV adoption and charging infrastructure
- Industrial reshoring
- Cloud computing and digital infrastructure expansion
- Increased cooling needs amid rising global temperatures
These developments, particularly in digital infrastructure and clean energy, represent powerful structural drivers of copper demand. The IEA forecasts global copper consumption to climb from 26 million tonnes in 2023 to nearly 33 million tonnes by 2035, a 26% increase fueled almost entirely by the global energy transition and digitalisation.
However, the U.S. remains structurally short on copper, importing over 50% of its needs—primarily from South America—due to decades of underinvestment in domestic mining and refining. Addressing that shortfall will take years, if not decades. In the meantime, a tariff-induced price premium risks making copper—and by extension, U.S. manufacturing and infrastructure—materially more expensive.
Recent months have seen a surge in copper shipments to the U.S. ahead of potential tariffs, and CME-monitored inventories now exceed those of London and Shanghai combined, even though the U.S. only consumes around 7% of global copper. This front-loading of inventories has temporarily reduced import needs, helping to ease the New York premium from above 30% to around 27%, though the full impact of a 50% tariff will take time to be felt in prices as current stocks are drawn down.
The proposal has unsurprisingly sparked concern among U.S. copper consumers, who fear long-term uncompetitiveness due to the slow pace of domestic supply expansion. Given this, it is our view that the eventual tariff may land closer to 25%—underscoring the importance of watching what Trump does, not what he says.
Copper: The Metal of the Future
The recent rally—initially driven by a tangible supply squeeze—highlights how quickly fundamentals can reassert themselves in a tight market. But the real story extends well beyond the short term. The accelerating shift toward clean energy, AI-driven digital infrastructure, and electrification is laying the foundation for sustained, structural demand growth.
If supply continues to lag—constrained by underinvestment in new mines and refining capacity—copper prices are poised to remain volatile and trend higher. With both short-term momentum and long-term megatrend tailwinds in its favor, copper is increasingly cementing its role as the defining commodity of the energy and digital transition era.
