As financial markets are shaken by the constantly evolving tariff announcements from President Trump, traders of physical copper are cashing in on the rewards presented by this turmoil. The American threats of imposing import tariffs on copper have created rarely seen opportunities for traders to move copper from one part of the world to another in order to make a profit.
The threats have created a rush for traders in America to import as much copper as possible before any tariffs take effect. This spike in demand has widened the gap between the price of copper on the Chicago Mercantile Exchange (CME) and the London Metal Exchange (LME) in Europe. As a result, lucrative arbitrage opportunities have sprung up and traders are rushing to bag the profits arising from buying physical copper on the LME and shipping it to the U.S.
This arbitrage opportunity is growing given the often contradictory statements from the White House. For example, last week while the president was addressing a joint session of Congress, he mentioned that imported steel, lumber, copper and aluminum would be subjected to a 25% import tariff. This was shocking information to the copper industry, and the difference in the price of the metal on the CME compared to the LME briefly exceeded $1,000 for every ton of copper.
However, it was later clarified that the president’s inclusion of copper on that list was a slip of the tongue.
The differences in the regional prices of metals like copper trigger a flurry of activity among traders so that they can benefit from arbitrage. For copper orders slated for delivery in May, the price difference was $800 for each ton. This difference is a very lucrative one for traders and it isn’t surprising that copper is being shipped from around the world to the U.S.
It is interesting to note that while traders of physical gold are making hay, investors don’t seem to be moved. Why is this? Investors tend to base their decisions on medium to long term outlooks, and the current market conditions are giving mixed signals. For example, there is a supply deficit building up, which would suggest that investors take long positions betting on the likelihood of prices increasing. However, the uncertainties of the U.S. tariffs and possible trade wars dampen the long term outlook for copper since it is likely to be caught in the crosshairs.
Furthermore, copper is often referred to as “Doctor Copper” because the dynamics seen in the market for this metal are indicative of global economic health. Global signs point to a possible recession around the world, and that isn’t good for copper bulls yet copper bears can’t take strong positions due to shifting policy decisions, especially in America.
Copper industry players like Torr Metals Inc. (TSX.V: TMET) are likely to take an interest in these shifting market conditions in order to determine how best to position themselves to benefit from this evolving situation.
NOTE TO INVESTORS: The latest news and updates relating to Torr Metals Inc. (TSX.V: TMET) are available in the company’s newsroom at https://ibn.fm/TMET
About MiningNewsWire
MiningNewsWire (“MNW”) is a specialized communications platform with a focus on developments and opportunities in the Global Mining and Resources sectors. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled recognition and brand awareness.
MNW is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.MiningNewsWire.com
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
MiningNewsWire
Los Angeles, CA
www.MiningNewsWire.com
310.299.1717 Office
Editor@MiningNewsWire.com
MiningNewsWire is powered by IBN
