COMEX copper futures surged after President Donald Trump ordered the US Commerce Department to investigate possible import tariffs on copper, ING’s commodity analysts Warren Patterson and Ewa Manthey notes.

Copper prices on the LME and COMEX continue to diverge

"The department has up to 270 days to report back to Trump. Copper prices on the LME and COMEX continue to diverge. LME copper is up around 8% year-to-date, while prices on COMEX have surged around 14%."

"Renewed tariff threats saw the COMEX-LME arbitrage spread widen back towards $900/t. There’s additional upside risk for copper in New York if tariffs are applied. The spread risks a pullback if tariffs fall short of expectations."

"The US produces around 5% of global copper mining output. Its reserves are also at around 5% of the total, according to the US Geological Survey (USGS). The country’s production has been on a downtrend -- dropping about 20% over the last decade, according to USGS. Meanwhile, the US imports roughly 45% of copper needs. It might be challenging to fill that gap with domestic production."