Section 232 tariffs on semi-finished copper products drive a structural $33/mt premium in COMEX over LME futures.
US copper tariffs have transformed the COMEX-LME arbitrage into a policy-driven trade, creating a $33 per tonne long-run spread bias. Analysts note the shift stems from Section 232 duties, including a 50% tariff on semi-finished products, while refined cathode tariffs remain under review for potential 15-30% phased increases by 2028.
Historically, LME inventories have exceeded COMEX levels by about 65% due to its larger warehouse network. The tariff regime now distorts physical flows, as traders exploit price differentials between the two physically deliverable contracts. The spread’s behavior reflects market pricing of future policy risks.
The arbitrage window has become central for hedging and trading strategies, replacing its former role as a technical curiosity.