Just three months after being hit by Trump's copper tariffs, the "most profitable" arbitrage trading is making a comeback.

Only three months after being hit hard by the thunderous but small rain of tariffs issued by Trump, the copper arbitrage trading, once known as "one of the most profitable commodity trades in modern history," has made a comeback. Recent news indicates that traders are once again betting that the Trump administration will impose high tariffs on copper next year. According to media reports on Friday, November 7th, including Mercuria Energy Group, Vitol Group, and Trafigura Group, several trading giants have been in talks with Chilean producers in recent weeks to secure annual agreements to supply copper to the United States in 2026, with some traders offering prices over $500 per ton higher than the London Metal Exchange (LME) benchmark copper price. These traders' bids are around 10 times the spot purchase price for Chinese manufacturers. The price of copper futures on the New York Comex has once again significantly exceeded the LME copper futures price. This reflects investors' expectations of the Trump administration restarting the commodity-grade copper tariff plan next year, meaning that the large-scale bets on copper tariffs that rocked the global copper market this year may continue to roil the market next year. The shadow of tariffs still lingers, as traders gamble on tariffs being reinstated. Earlier this year, traders such as Mercuria and Trafigura made huge profits by shipping large amounts of copper to the United States ahead of Trump's formal announcement of commodity-grade copper tariffs in February. Record imports tightened the global market, leading to historic highs in copper prices, despite lackluster demand for this key industrial metal, manufacturers still faced intense supply competition. The prospect of tariffs on refined copper has not disappeared completely. The U.S. Department of Commerce has proposed delaying the imposition of tariffs, starting to impose a 15% tariff in 2027, increasing to 30% in 2028. Trump has instructed the Commerce Department to provide the latest information on the U.S. copper market by the end of June 2026. It is this uncertainty that has led traders to see betting opportunities once again. Traders are willing to pay such high premiums because they can resell these goods at higher prices in the U.S. market. Following the above media reports on Friday, representatives of Mercuria and Trafigura declined to comment, and a Vitol spokesperson did not respond to requests for comment. Three months ago, the "most profitable" trade in history collapsed in a day Readers of Wall Street News should still remember the dramatic turn of events with copper tariffs at the end of July this year. According to CCTV News, on July 30, local time, the White House announced that President Trump had signed a proclamation imposing tariffs on several categories of imported copper products, excluding copper raw materials. The proclamation stated that starting from August 1, a 50% tariff would be imposed on imported semi-finished copper products (such as copper pipes, wires, rods, sheets, and tubes) and copper-intensive derivative products (such as fittings, cables, connectors, and electrical components). At the time, the White House stated that copper input materials (such as copper ore, concentrate, blister copper, cathode copper, and anode copper) and copper scrap were not subject to "Section 232" or equivalent tariffs. The unexpected tariff exemption for raw copper completely disrupted market expectations. The copper futures traded on the New York Commodities Exchange plummeted 22% that day, marking the largest single-day drop since at least 1988, while the London Metal Exchange copper price only fell by 0.9%. Prior to this, the Comex copper premium at one point exceeded the LME benchmark price by over 20%, but after the tariff exemption announcement, the price difference quickly disappeared, and the Comex New York copper futures even turned to discounts. Wall Street News mentioned at the time that as of the evening of July 29, only 675 put option contracts were in-the-money, with a nominal value of $94.4 million. However, after the announcement of the exemption, the number of profitable put option contracts exceeded 31,000, with a total value of $3.54 billion. Phil Streible, Chief Market Strategist at Blue Line Futures LLC, commented at the time that these "lottery tickets" had paid off.