Copper gains 5% in May as US tariff deadline nears, Goldman lifts outlook

LME copper rose 0.4% to $13,687.50 a ton on Monday, with less than a month before the US tariff deadline on refined copper imports.

"US imports beat expectations in H1 2026, and we expect US imports to reaccelerate over the coming month, reflecting the now-open import arbitrage," Aurelia Waltham, an analyst at Goldman Sachs, said in a note.

The US Commerce Secretary must deliver an updated recommendation to President Donald Trump by June 30 on whether to impose a 15% tariff on refined copper starting next year. The premium of US copper prices over international benchmarks has widened again, driving a fresh wave of shipments to American ports. Copper futures on the New York Mercantile Exchange climbed 1% to $6.45 a pound, the highest close since May 14.

Goldman Sachs raised its end-2026 LME copper price forecast by more than 10% to $13,735 a ton from $12,465, citing US stockpiling and weaker-than-expected mine supply. The bank's base case assumes the US will again delay any tariffs on refined metal. Copper has gained 5% in May, supported also by US-Iran ceasefire negotiations that could ease disruptions to global trade through the Strait of Hormuz.

Supply Tightness Underpins Rally

Copper's advance reflects a market where physical supply constraints and policy uncertainty are converging. LME warehouse stocks have drawn down as traders redirect metal to the US to capture the widening arbitrage. The supply picture is further tightened by mine disruptions: Chilean output, the world's largest, has lagged expectations, while treatment charges at Chinese smelters have fallen to levels that signal concentrate scarcity. Copper at current levels is about 44% above the 10-year average of roughly $9,500 a ton and within 10% of the all-time high near $15,000 set in March 2026.

The June 30 deadline is the next major catalyst. If the Commerce Department recommends proceeding with the 15% tariff, the US premium could widen further, accelerating stockpiling. A delay, which Goldman Sachs expects, would likely ease near-term price pressure but keep the market on edge ahead of a potential 2027 implementation.

This article is for informational purposes only and does not constitute investment advice.