Investing.com -- Copper prices have hit the $10,000 mark, driven by tariff speculation, tightening global supply, and shifting trade flows. Neil Welsh, Head of Metals at FCA regulated multi-asset brokerage Britannia Global Markets, highlighted the role of these factors in the recent surge in copper prices.

The anticipation of an influx of 100,000–150,000 metric tons of copper into the U.S is causing urgency among traders to get ahead of potential tariffs before they take effect.

The 12% premium between COMEX and LME copper is creating an arbitrage incentive, pulling metal away from China and other markets. This reshuffling is making supply tightness in Asia worse and further fuelling copper’s rally while also attracting speculative interest.

From a physical perspective, mine output growth is continuously being revised downwards, and Chinese smelters are implementing production cuts, adding to bullish sentiment.

The FOMC’s decision to hold rates steady could create a supportive environment for industrial metals. By maintaining interest rates and indicating two potential rate cuts this year, the Fed has strengthened expectations of a more lenient monetary policy.

Despite this, concerns remain about a potential mild U.S. recession, which could eventually dampen industrial demand. More specifically for base metals, developments in the tariff narrative, which have contributed to copper’s rise to $10,000, could also contribute to a potential reversal of prices.

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