Spot copper prices are trading around $6.4 per pound on Wednesday as Wall Street digests the Midterm election that sent a risk-off alarm through the market.
Arguably, the biggest story for the orange metal in 2026 was the cross-market arbitrage. The prospect of a US tariff on refined-copper imports has pulled vast amounts of metal into the US and kept Comex futures at a premium to LME prices.
That gap had narrowed in recent weeks as traders doubted President Donald Trump would go ahead with the levies, because voters blamed his import duties in part for higher living costs. The front-month Comex-LME spread briefly turned negative on Wednesday. But then rebounded, leaving Comex about $100 a ton above London by mid-morning.
The political twist is that a Democratic Congress may not kill the copper tariff. A Trump who is boxed in at home could turn to executive trade powers, separating the US-focused Freeport-McMoRan (FCX) from the rest of the Global X Copper Miners ETF (COPX).
Why Gridlock Puts Tariffs Back in Play
James M. Dorsey, a senior fellow at the S. Rajaratnam School of International Studies, called the result a clear verdict on cost-of-living pressures, inflation and the Iran war. "It's a rebuke, to be clear," he said in an interview for A News.
The legislative consequences are serious. "As a matter of principle, Trump's legislative period is over," Dorsey said. He added that Trump will also struggle to get cabinet and Supreme Court nominees confirmed.
Don't expect the White House to back down, though. "The mood in the White House reportedly is defiant," Dorsey said. He noted that Trump "has called himself Mr. Veto" and that "the president has tremendous powers."
That stance matches ING's framework.
"Trade is another power the president can wield unilaterally without Congress," ING economist James Smith wrote. He pointed to the Section 301 tariff structure. If Trump can't pass bills, refined-copper duties are a lever he can pull right away.
Data-Center Headwinds vs. the Domestic Tariff Shield
The Democrats don't need full control over tariffs to have their own copper levers. According to Bloomberg, Li Xuezhi, head of research at Chaos Ternary Futures Co., said tighter scrutiny of the AI sector under a Democratic Congress will keep pressure on copper despite short-term price swings.
ING has flagged the politics too. Smith cited an Economist poll showing Democratic support surging among people living within 2 kilometers of a data center, a group of roughly 12 million Americans.
Slower data-center construction would weigh on global demand and hit the international miners that make up most of COPX.
A US tariff, however, would lift Comex prices relative to global benchmarks, shielding domestic producers. With Freeport only about 5% of the fund, COPX holders would get little of that protection.
Freeport Doubles Down
Freeport has already made its move. This morning the company's board approved a $4.5 billion expansion of the wholly owned Bagdad copper and molybdenum mine in Arizona.
The project should more than double Bagdad's mining and milling rates. It should add about 115,000 metric tons a day of processing capacity, raising long-term copper output above 400 million pounds a year- an increase of about 225 million pounds.
The company expects unit net cash costs to fall about 20%, helped by the mine's reserve life of more than 80 years and its autonomous haulage fleet. Initial production is targeted for mid-2030.
