US copper prices are close to historic highs. The market weighs the risk of refined copper tariffs and expectations of the reopening of the Strait of Hormuz

The Zhitong Finance App learned that while investors are awaiting the US Trump administration's decision on refined copper tariffs, progress regarding the expected reopening of the Strait of Hormuz has boosted market risk appetite, and the price of New York copper futures is hovering near the highest level in history. According to the data, COMEX copper futures were reported at $6.65 per pound, less than 1% lower than the all-time high set in May.

Since this year, COMEX copper prices have increased by more than 17% and further expanded its premium over the London Metal Exchange (LME) copper price. The reason is that traders are planning for the US Trump administration's possible announcement of import tariff measures.

Notably, although the June 30 deadline for US Secretary of Commerce Lutnick to submit tariff proposals has passed, the White House has yet to announce the final policy. Producers, consumers, and traders are closely watching whether Trump will further extend current trade protection measures for semi-finished copper products to refined raw materials such as copper. However, no timetable has yet been announced for when the Trump administration will make a final decision on whether to levy tariffs on refined copper.

Driven by tariff expectations, US official COMEX copper stocks have increased by more than 40% since this year, reaching a record high. Currently, the market generally estimates that the total inventory of copper in the US has exceeded 1 million tons. The market believes that in the context of rapid development of power grid construction, artificial intelligence (AI), electric vehicles, and defense industries, copper is becoming an increasingly important strategic resource for the US, and tariff expectations are objectively driving the US to establish strategic inventories ahead of schedule.

And behind the continued increase in US copper inventories, inventories from other regions of the world are constantly being drawn out — America's higher import tax rates drive large amounts of copper resources to US ports, leading to tighter supply in other regional markets. According to the data, the US imported about 200,000 tons of copper in July, setting the highest record in a single month since IHS Markit began statistics in 2014, and the fastest import rate in at least 12 years. Currently, about 110,900 tons of copper are stored in US ports outside the London Metal Exchange (LME) warehouse receipt system.

Market participants believe that if Trump finally decides to tax refined copper, the last round of import peaks may occur before the tariffs are officially implemented; if the plan is abandoned, the large inventory and arbitrage positions accumulated over the past 18 months may be quickly liquidated, and the flow of global copper trade will also be readjusted.

Meanwhile, with regard to the situation in the Middle East, market concerns about the further escalation of the US-Iran war are shifting to expectations that the two sides will reach an agreement and reopen the Strait of Hormuz. According to the latest reports, regional sources and US officials said that the US, Iran, and Oman are “close to reaching” an interim agreement to reopen the Strait of Hormuz, and the US side hopes to announce the news that an interim agreement has been reached on August 5.

The report said that negotiations on the provisional agreement for the reopening of the Strait of Hormuz have been going on for weeks. The provisional agreement aims to restore the cease-fire between the US and Iran and restart negotiations on the Iran nuclear agreement. At the same time, “it partially satisfies Iran's demand for greater control over the passage through the Strait of Hormuz.” This kind of control Iran did not have before the war.

The report quoted two regional sources as saying that the interim agreement currently under discussion sets out a 60-day temporary arrangement for the reopening of the Strait of Hormuz, to be implemented jointly by Oman and Iran, and the period may be further extended.

Most commodities, including basic metals such as copper, are expected to benefit from measures to promote the resolution of the Middle East conflict that has impacted the global market since this year. The latest round of optimism has allayed market concerns about inflation and prompted traders to lower their bets on the Fed raising interest rates for the rest of 2026. This is beneficial for base metals, which are highly correlated with global economic growth expectations.