Copper Arbitrage Narrows to $169 a Ton as New Orleans Cargo Logjam Meets Tariff Delay
A record $500 million cargo of African copper bound for New Orleans has exposed the logistics limits of the US tariff trade, with Comex warehouse capacity stretched, the arbitrage to LME down to roughly $169 a ton from $789, and LME copper still holding near record territory above $14,700 a ton.
The Liberian-flagged bulk carrier Nord Norfolk is carrying roughly half a billion dollars of African copper, the highest market value for a single commodity shipment ever recorded by analytics firm Kpler. The Port of New Orleans, a key metals gateway and major hub for CME Group's Comex copper warehouses, is already largely full before another roughly 100,000 metric tons of African and South American copper arrives in September and October. Anton Posner, chief executive of logistics provider Mercury Resources, said there is serious congestion at marine terminals causing delays loading copper and other metals onto trucks and railcars, with his firm moving metal up the Mississippi by barge instead.
The economics of that trade are thinning. LME copper has climbed about 50% since February last year, when President Trump first formally proposed tariffs on the metal, and US futures rallied even more sharply, creating large arbitrage profits for traders and producers shipping into the US. One measure now puts the arbitrage gap at $169 a ton versus $789 at this year's height, which weakens the incentive to keep shipping to America and could redirect some cargoes to Asia. Comex has added 20 warehouses and nearly 725,000 short tons of copper capacity since the start of 2025, equivalent to about 39% of annual US refined copper consumption, with new sites in Mobile, Chicago and Atlanta. The White House has still neither confirmed nor ruled out the proposed 15% refined copper tariff from January 2027 rising to 30% in 2028.
Underlying balances remain tight even as the tariff trade cools. Official LME data for 22 September showed cash copper at $14,797 a ton with copper stocks at 254,250 tons, down 1,625 tons on the day, while aluminium was $3,242 with 242,125 tons, zinc $4,006 with 114,725 tons and nickel $16,410 with 278,628 tons. Mine supply is the structural constraint: world mine production fell 1.1% in the first half of 2026, with Chile down 6.6%, Indonesian concentrate output down 32% while Grasberg remains constrained, and DRC concentrate output off 34% after seismic damage at Kamoa-Kakula. Morgan Stanley, which began the year expecting mine supply to grow, now sees it flat to slightly lower, which would make 2026 the first year of falling mine output since 2017. On the smelting side, China's primary aluminium output hit a record 3.98 million tons in August, up 4.7% year on year, an annualised pace above the government's 45 million ton capacity ceiling.