FACTBOX: Trump's 50% copper tariff plan sends US prices to record highs

Copper prices in the US reached record levels following President Donald Trump's announcement on July 8 regarding a proposed 50% tariff on copper imports.

In a subsequent televised interview, US Commerce Secretary Howard Lutnick indicated that the implementation of tariffs on US copper imports is anticipated by the end of July or by Aug. 1.

In February, the US initiated a Section 232 investigation to evaluate the potential imposition of tariffs on copper imports, aimed at enhancing domestic production and encouraging investment in new capacities. The investigation is set to conclude by November.

The proposed 50% tariff rate, as outlined by President Trump, aligns with the recently established tariffs on steel and aluminum but exceeds expectations held by many industry stakeholders.

Trump's announcement triggered an immediate market response, with COMEX copper futures soaring more than 12% as traders rushed to secure volumes in anticipation of the impending tariffs.

Market analysts suggest this volatility is likely to persist until more concrete details regarding the tariffs' implementation -- such as timing, product scope and potential exemptions for specific countries -- are disclosed.

Surging demand

• Copper is a critical metal for a wide variety of products and applications, including electronics, transportation, power transmission and distribution, building construction and industrial machinery.
• Applications aligned with the energy transition, such as EV batteries and storage, wind energy, solar photovoltaics and other low-carbon energy technologies are also heavily dependent on copper components.
• Trump's announcement comes as the US and the rest of the world brace for a dramatic surge in copper demand over the coming decade, fueled by expanding electrification. With domestic consumption of refined copper estimated at 1.62 million mt in 2024, S&P Global Market Intelligence projects US demand will increase by more than 30% by 2035.

US copper production

• The US has more than 275 million mt of copper reserves and resources, enough to meet the nation's projected demand for the foreseeable future; however, new US mining projects currently average 29 years to begin production.
• According to S&P Market Intelligence, the US produced approximately 908,000 mt of refined copper in 2024, with production focused primarily on Arizona, complemented by smaller volumes from Michigan, Missouri, Montana, Nevada, New Mexico and Utah.
• More than 32% of the US copper supply comes from recycled sources. While US recycling rates can be increased significantly, copper products are durable and can last decades, limiting the amount of copper currently available for recycling. While recycling more copper in the US for the domestic market is an attractive sourcing option, recycling capacity must be increased to accommodate this retained scrap.

Import dependence

• Despite its significant domestic copper mining and refining capacity, the US remains highly dependent on imported volumes, with net imports accounting for approximately 44% of demand.
• Official customs data from the US Department of Commerce shows that the US imported approximately 922,000 mt of refined copper and copper alloys in 2024. Chile is the largest import source, accounting for 70% of total import volumes, followed by Canada (17%) and Peru (7%).

Prices

• The copper futures prices for September delivery on the COMEX jumped to $5.69/lb from $5.01/lb within a span of a few minutes during the July 8 trading day, exchange data showed. The contract was at $5.60/lb as of July 9, 2:30 am US CT time (0730 GMT).
• As a result, the spread between the COMEX and London Metal Exchange prices widened to a record high on July 9. Despite US copper imports becoming more profitable due to the widened spread, traders were seen hesitating to supply copper into the US.
• LME copper price is considered as the global benchmark and used by major players such as China for copper trade.
• In China, Platts assessed CIF China clean copper concentrate treatment and refining charges at minus $43.20/mt and minus 4.32 cents/lb, respectively, July 9, up $1.20 /mt and 0.12 cent/lb from July 8.