Copper prices (HG=F) hit new highs on Tuesday as investors anticipated near-term supply tightenings and escalating tariffs.

Futures on the Comex exchange in New York traded near $6.85 a pound, while copper on the London Metal Exchange touched $14,617 a metric ton to hit a second intraday record in a row.

Copper prices are up roughly 21% year to date. Copper Miners ETF (COPX) have also rallied 32% during the same period, according to Yahoo Finance’s AlphaSpace data.

US buyers have been snapping up more of the commodity in expectation of higher tariffs. The energy transition and AI build-out are also sucking up supply.

On Tuesday, Canada increased levies on certain US imports to 50%, including certain US-made copper products, in response to American tariffs on Canadian products.

Meanwhile, Wall Street has been waiting on a long-delayed review from the Department of Commerce, specifically regarding imports of unrefined and refined copper cathode, the raw physical metal that is traded on exchanges. President Trump last year imposed a 50% tariff on imports of certain semi-finished copper products. The Commerce Department was directed to look at whether refined copper should also be subject to restrictions.

Because the US has been pulling in so much physical supply ahead of that report, China has been forced to pay higher prices to compete for the remaining global supply, with inventories in Shanghai Futures Exchange warehouses falling to their lowest level since 2024 last week.

“We think copper still has more left in the tank over the balance of the year,” wrote JPMorgan analysts on Tuesday. The analysts see the metal reaching $14,800 per metric ton in the fourth quarter of this year, “with overshoot potential” as China heads into peak demand season for the metal.

What’s more, the appetite for the commodity is set to surge in the long run. Copper demand is expected to increase by 50% above current levels from now until 2040, according to S&P Global. This is due in part to electric grid build-outs and the growth of AI data centers.

Still, some strategists warn of a near-term pullback as traders holding heavy “long” positions could unwind their bets.

“Copper may be an accident waiting to happen,” wrote Mike McGlone, senior commodity strategist for Bloomberg Intelligence, on Tuesday.

“Hedge funds are quite long, and the metal’s correlation with the S&P 500 (SPX) has reached multidecade highs with markets rising. What can go wrong?” he wrote, suggesting the metal could revert back toward its baseline of $5.

Ines Ferre is a Senior Business Reporter for Yahoo Finance covering the US stock market, publicly traded companies, and commodities.

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