US Copper futures hit a file excessive yesterday after President Donald Trump introduced he plans a 50% tariff on Copper imports. The magnitude of yesterday’s spike additionally set a file for a one-day enhance. Commerce Secretary Howard Lutnick mentioned the Copper tariffs are prone to be in place by the tip of July. This may be the primary time Copper has confronted import duties into the US. Whereas the transfer doesn’t come as a shock, the dimensions of the levy is shocking. The market had anticipated a tariff of as much as 25%, ING’s commodity consultants Ewa Manthey and Warren Patterson word.
Trump’s 50% Copper tariff sparks file surge
“In February, Trump ordered a Part 232 investigation into Copper imports. Nevertheless, the 270-day deadline for the investigation would have allowed it to proceed till November. That is prone to be constructive for Comex Copper costs, a minimum of for now. Extra shopping for is probably going earlier than tariffs come into impact. Nevertheless, a 50% tariff on imports additionally dangers demand destruction. Copper within the US is now up greater than 40% this 12 months, with costs persevering with to learn from the front-running of tariffs.”
“But this will probably be bearish for LME costs, with the wave of Copper speeding to the US prone to cease as soon as the tariffs are carried out. At that time, US consumers are prone to begin working via their inventories. There’s now extra Copper saved in Comex warehouses than there may be within the LME and Shanghai Futures Alternate (SHFE) warehouses mixed. This may possible enhance the provision of Copper, ex-US, which might weigh on LME Copper costs. This may possible solely play out as soon as tariffs are carried out. For now, the Comex-LME arb has widened to greater than $2000/t, which can assist the sturdy circulation of Copper into the US.”
“The US is reliant on Copper imports for home consumption. In 2024, the US imported round 850,000 tonnes of Copper (excluding scrap), accounting for round 50% of home consumption. Chile is the most important import supply, at round 40%, adopted by Canada and Mexico. Not less than within the close to time period, it could be difficult to interchange US Copper imports with home manufacturing.”
