Morning from Copenhagen.

Trump was out yesterday evening with fresh threats on copper tariffs, fueling an already heated rally in COMEX-listed copper. We are now approaching a 17% spread between COMEX and LME prices, which should be seen as the market’s probability-weighted expectation of the level of tariffs to be imposed on copper already from next week—if Trump’s words are to be trusted (let’s see about that).

The 25% tariff handle has been looming in markets, and should that materialize, the spread will likely widen to 20–25% in a more persistent fashion, making the risk/reward of betting against copper lukewarm at best. However, if tariffs are only 10% or even scrapped entirely, we’d expect a swift retracement toward the 450–495 range in the COMEX contract.

We are currently short copper via options as a benign tariff bet, but wouldn’t touch the future outright here—there’s simply no edge in predicting Trump’s policy moves (as we’ve discussed plenty of times already).

Chart 1: COMEX Copper Just Keeps on Going