Copper prices have surged past $13,000 per ton, driven by two main concerns: a strike at Chile\u2019s Mantoverde mine, and fears of renewed US tariffs. The strike might extend beyond two months, impacting supply perceptions, although the mine contributes less than 0.5% of global copper supply. The operator plans to maintain 30% of usual production with available workers. The dispute reflects rising tensions between workers and mining companies amid high prices, with possible implications for further industrial actions.<\/p>\n
The second concern is related to US tariffs on refined copper, with a decision expected by the end of June. Past tariffs led to notable premiums on the New York COMEX compared to the LME. Recently, these premiums have decreased, yet COMEX copper stocks continue to rise, leading to worries of future material scarcity. The market reaction has been marked by increased trading activity, with commodity analysts observing the situation closely. The developments underscore ongoing uncertainties in global copper supply dynamics.<\/p>\n
Looking back at the events of 2025, the price spike above $13,000 per ton was driven by supply fears from the Mantoverde mine strike and the anticipation of US tariffs. Those supply-side issues have not gone away, creating a tense backdrop for the market as we begin 2026. The high price level means any new disruption could trigger another sharp rally.<\/p>\n
Given this continued threat of supply shocks, we believe traders should consider buying call options. The labor tensions we saw in Chile during 2025 continue to simmer across the region, making further strikes a real possibility throughout the year. These options provide exposure to potential upside if another supply disruption sends prices soaring again.<\/p>\n
However, demand uncertainty warrants caution and makes protective put options a sensible hedge. While China\u2019s copper imports remained strong through the end of 2025, hitting an annual record of 27.54 million tons, there are concerns about its slowing property sector. A significant downturn in Chinese construction could quickly pull prices down from these elevated levels.<\/p>\n
The market dislocation created by the US tariffs imposed last summer also presents an opportunity. We are seeing a significant difference between copper available in London and New York. This suggests traders could explore spread trades, such as going long on LME futures while shorting COMEX futures, to profit from the shifting regional premiums.<\/p>\n
Recent statistics make this regional scarcity clear and support such a strategy. As of this week, LME-registered copper stocks are hovering near 18-year lows at a critically tight 55,550 metric tons. In contrast, COMEX inventories remain more comfortable around 20,100 short tons, reflecting the stockpiling we saw ahead of the 2025 tariff decisions.<\/p>\n
With implied volatility likely to remain high, outright long or short positions are risky. We feel that using strategies like bull call spreads could be effective. This allows for participation in any further price increases while defining and limiting the maximum risk, which is a prudent approach at this stage.<\/p>\n","protected":false},"excerpt":{"rendered":"
Copper prices exceed $13,000\/ton amid Chile mine strike and possible new US tariffs impacting supply fears.<\/p>\n","protected":false},"author":62,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-38416","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38416","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=38416"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/38416\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=38416"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=38416"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=38416"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}