Muted LME trading masks growing copper tightness; traders eye Section 232 tariff risk
Published by:Julienne Raboca<>
10 Jun 2025 @ 11:06 UTC

Copper spreads on the London Metal Exchange remained in steep backwardation on Tuesday June 10, underpinned by falling inventories and nearly 16,000 tonnes of newly canceled copper warrants over two days, as market participants keep watch on US trade policy. Meanwhile, tin posted a 6.5% weekly gain, even as Southeast Asian premiums narrow under pressure from a tightening spread.
LME base metals prices were mostly flat in early trading on Tuesday June 10, with only lead edging higher by 0.23%.
Three-month futures prices at 9am on Tuesday, compared with Monday’s 5pm close: • Copper: $9,753.50 per tonne, down by 0.4% • Aluminium: $2,479 per tonne, unchanged • Nickel: $15,385 per tonne, down by 0.23% • Zinc: $2,644.50 per tonne, down by 0.19% • Lead: $1,991 per tonne, up by 0.23% • Tin: $32,580 per tonne, down by 0.4%
Copper tightness accelerates amid arbitrage speculation Copper spreads widened further on Monday, with the cash/three-month backwardation rising to $95.78 per tonne from $69.84 per tonne on Friday. LME copper inventories fell by 2,000 tonnes on Tuesday morning after a 10,000-tonne drop on Monday, while 5,925 tonnes of fresh cancellations on Tuesday added to nearly 16,000 tonnes canceled over two days.
Market participants attributed the warrant activity to arbitrage opportunities with the US market, particularly following speculation about potential Section 232 tariffs on copper.
“Trump doubling Section 232 tariffs on aluminium and steel has widened the copper arbitrage again and redoubled traders’ efforts to benefit from that trade now there’s a chance that copper may get a 50% tariff too,” Andrew Cole, principal consulting analyst at Fastmarkets, said.
The arbitrage dynamics have intensified demand for LME-to-CME metal shifts, according to market sources.
“Everyone is looking for metal to send to the US. [The] European market [is] extremely tight for cathode. My assumption is it’s the same play… take out of LME and send to CME,” a copper mining source said.
China’s May copper import data showed mixed signals for domestic demand. Imports of unwrought copper fell 16.2% year on year to 427,200 tonnes, according to customs data.
Tin rallies but Asian premiums narrow Tin posted the largest weekly price gain among base metals, rising 6.51% through Monday’s close, while the cash/three-month backwardation narrowed to $25 per tonne from $50 per tonne.
The rally comes amid continued supply concerns, with mining resumption in Myanmar’s Wa region progressing slowly. Major operators at Man Maw remain reluctant to pay higher licensing fees, while strict government controls on equipment and personnel movement are contributing to delays. Meaningful increases in production and exports are not expected until July or August, keeping China’s feedstock supply tight, according to the International Tin Association.
Andy Farida, base metals research analyst at Fastmarkets, noted that tin has been on a tear since the start of June, driven by dip-buying interest near the psychological price level of $30,000 per tonne.
There are two folds to the tin supply story here, with the highly anticipated Myanmar Man Maw mine still unlikely to resume operation following earthquake in the region which also badly need re-investment to dewater, retool and get the skilled labour from China. Meanwhile, tin exports out of Indonesia is improving but not at such a rate that helps to offset the supply concern, Farida said.
Fastmarkets’ tin min 99.85% ingot warrant premium, in-whs South East Asian arrowed to $25-300 per tonne from $25-400 per tonne on June 4 amid spread tightness. Only 60 tonnes of on-warrant tin stock were available in Singapore, with premiums pulled lower by limited desirable brand availability and high backwardation dampening spot interest.
Trade optimism provides mild support Easing trade tensions between the US and China provided some support to base metals sentiment last week. The renewed optimism comes as US-China trade talks resumed in London on Monday.
“Easing trade tensions lifted the energy and metals sectors. Copper extended last week’s gains on easing trade tensions,” Daniel Hynes, senior commodity strategist at ANZ, said in reference to Monday’s numbers.
Positive signs emerged from trade talks, with expectations that export controls from the US will be eased and rare earth materials released in volume. However, China’s May import data reflected subdued industrial activity, with weaker demand weighing on import volumes despite declining exchange inventories and elevated spot premiums.
Positive signs emerged from trade talks, with expectations that export controls from the US will be eased and rare earth materials released in volume. The improving macroeconomic backdrop since June, as trade talks between the US and China continue to bolster risk-on sentiment, has created broader support for base metals.
“With copper leading the charge higher, this has created the perception that the overall health of the global economy is recovering,” Farida said. He added that other base metals have caught the tailwinds, prompting participants to buy into the dip.