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The rush to get copper into the US ahead of possible tariffs has created shortages and price dislocations for the red metal in continental Europe.
The region’s spot market has been hit by a lack of available copper for immediate delivery, analysts at Argus Media said.
This has pushed up premiums to record highs on the continent, which are paid on top of benchmark prices on the London Metal Exchange, Europe’s biggest hub where much of the stocks are stored.
The premium for copper delivered to Germany rose to $250 per tonne, while those to Livorno and Rotterdam hit $180 per tonne at the end of April, according to data group Fastmarkets.
Although markets have calmed since US President Donald Trump’s “liberation day” announcement, the record premiums highlight the persisting distortions caused by the threat of tariffs in a sector vital for industry.
Copper is used in an array of applications from wiring to industrial machinery and electronics.
Stocks in China have also rapidly declined recently because of the flows to the US, where prices and warehouse supplies have soared.
Copper prices on the LME, the world’s benchmark, were trading at about $9,400 per tonne on Friday — about $700 per tonne cheaper than on the US Comex exchange.
LME copper prices jumped to more than $10,000 per tonne in March on tariff fears after Trump introduced a probe into the market that could result in levies on the red metal. The US Comex price, meanwhile, jumped to more than $11,500 per tonne at the same time.
European copper group Aurubis said in its earnings report on Thursday that there was “surplus demand” for copper on the spot market globally. The company added that it was only active in the spot market “to a limited extent” and sold most of its copper in long-term contracts.
Aurubis told the Financial Times that the price distortions between London and New York had created an arbitrage opportunity, with traders buying the cheaper metal in Asia and Europe and then selling it at a premium in the US.
Buyers are also increasingly considering turning to the copper scrap market, where discounts have significantly narrowed compared with LME prices, analysts said.
Bare bright copper scrap in Europe jumped to 98-99 per cent of the LME price from 97.50-98.50 per cent at the start of this year, according to Argus Media data.
“If that tips over to flat LME or even premium, that’s when you know that people are really desperate for copper units,” said Ronan Murphy, head of copper pricing in Europe at Argus Media. “All buyers are exposed” and were “worried about getting extra supply if they need it”, he added.
The higher European copper premiums still represent only about 2 per cent of the overall cost for the metal.
But buyers are price sensitive, with some end users struggling with higher commodity prices because of trade dislocations and high European power prices.