Traders are paying millions to secure copper supplies, driven by fears of US tariffs under Donald Trump. Mercuria Energy Group agreed to pay $250 million upfront for three years’ supply from a Chinese-owned mine in the Democratic Republic of Congo. Such prepayment deals are now common, as the US copper premium over global prices attracts massive shipments.
Chinese buyers are paying the highest premiums for cathodes in nearly four years. The competition has enabled producers to demand large upfront payments, fueling a mining boom in Congo, now the world’s second-largest copper producer after Chile. Kostas Bintas of Mercuria noted prices are policy-driven.
If no tariff is imposed, copper may flow to China, potentially collapsing the arbitrage. The trade remains open, suggesting a tariff is expected. If prices fall, past deals may become financially burdensome.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing