Copper traders are scrambling to reroute deliveries to Hawaii and Puerto Rico in an effort to circumvent potential 50 per cent tariffs proposed by Donald Trump. This move aims to capitalise on a highly profitable arbitrage opportunity that has dominated the copper market for months. The tariff announcement has led to significant price discrepancies, with New York futures surging to a 25 per cent premium over international benchmarks. Traders who can deliver copper into the US before the tariffs take effect stand to gain substantial profits, while delays could result in considerable losses.
The situation follows Trump’s initial tariff plans in February, which triggered a surge in US copper prices. This prompted a rush to deliver metal to the United States, causing domestic stockpiles to swell while creating supply constraints elsewhere. Although shipments had begun to decrease recently as traders anticipated a tariff announcement, significant volumes of copper are still en route to US ports. Market participants estimate that US copper inventories could reach 500,000 tonnes in the coming weeks, with a large portion stored in New Orleans and Port Panama City in Florida.
The market disruption has prompted frantic activity among traders. Many have been working around the clock to make critical decisions about existing shipments and the feasibility of expediting further deliveries. The focus is now on finding alternative entry points into the US, such as Hawaii and Puerto Rico, to avoid the impending tariffs and secure profits before the window closes.
