Imminent Tariff Ruling Leads Trafigura to Massive LME Copper Withdrawals

Reuters reported on May 22 that Trafigura Group plans to withdraw a large amount of copper stockpiles from the LME-registered warehouse in New Orleans. On Thursday alone, the withdrawal exceeded 30,000 tons, bringing the total cancellation at the New Orleans warehouse to 45,675 tons. The global LME copper cancellation on that day exceeded 50,000 tons, with the remaining approximately 22,000 tons mainly from the Kaohsiung warehouse in Taiwan.

Trafigura refused to comment on this matter. The LME data itself does not disclose the responsible party for the stock movements; the information above comes from two industry insiders who wished to remain anonymous.

The context of this withdrawal is the approaching deadline for the U.S. copper tariff decision. The U.S. government is expected to make a decision on whether to levy taxes on copper metal imports by the end of June, following up on the Section 232 investigation initiated by Trump in February last year. Last year, the U.S. imposed a 50% tariff on imports of semi-finished copper products such as copper tubes and wires.

Copper stored in LME warehouses registered in the U.S. is usually located in free trade zones or bonded areas and has not officially entered the U.S. territory, hence temporary import tariffs do not apply. Once the withdrawal is completed and enters the domestic market, buyers can lock in the supply prices before the tariffs are implemented, which is precisely the core value of holding copper stocks within the U.S. at present.

From a broader perspective, since the initiation of the Section 232 investigation in February 2025, a significant amount of copper stockpiles has flowed from LME and Shanghai Futures Exchange warehouses to the U.S. COMEX copper warehouse inventories currently stand at 574,864 tons, an increase of over 550% since the investigation began.

For the market, the tariff decision at the end of June is the most critical observation point at the moment. If refined copper is included in the scope of taxation, the global copper trade flow will face further reshaping, and domestic copper mining and smelting companies are expected to benefit from the price support brought about by the increase in import costs.