Event: The US White House stated on the 30th that Trump signed a proclamation announcing the imposition of tariffs on several categories of imported copper products. The proclamation indicates that a 50% tariff will be generally imposed on imported semi-finished copper products (such as copper pipes, copper wires, copper billets, copper plates, and copper tubes) and copper-intensive derivative products (such as pipe fittings, cables, connectors, and electrical components) starting from August 1. The White House stated that copper input materials (such as copper ore, concentrate, matte copper, copper cathode, and copper anode) and copper scrap are not subject to "Section 232" or reciprocal tariffs. Market Reaction: COMEX copper prices plummeted continuously, dropping by over 18% on July 30th, and the decline continued today. LME copper and SHFE copper showed relatively small reactions. As a result, the price spread between COMEX copper and LME copper narrowed sharply from above $2,500, even falling into negative territory at one point, and the regional premium structure completely collapsed. Interpretation: The US's move to impose tariffs on imported copper clearly surprised the market, as the scope of the tariffs fell significantly short of market expectations. The main reason is that in early July, the US President indicated consideration of imposing a 50% tariff on copper imported into the US. At that time, the market generally believed that the tariffs would be imposed on refined copper, with the possibility of imposing tariffs on other copper products. However, this statement directly excluded various copper raw materials and refined copper, implying that there would be no increase in the subsequent import costs of US copper, and the logic of the previous strength in US copper prices no longer held. As a result, COMEX copper prices fell sharply. Due to the collapse of the extremely high and distorted premium structure of US copper caused by the sharp decline in COMEX copper prices, traders will no longer have any incentive to transport copper from other regions to the US, and the US's siphoning effect on global copper will completely disappear. Moreover, before this, US copper imports this year had already approached the total imports of last year. Therefore, in the remaining time of this year, without the driving force of price spreads, the inflow of copper from other regions to the US may also be relatively limited, and there is even the possibility of re-exports. The market continues to worry about more copper being transferred to LME delivery warehouses or flowing into major consumption regions such as China. Since LME copper and SHFE copper did not continue to follow the rise in US copper prices in early July, they did not follow the sharp decline this time either. Against the backdrop of a weakened impact of tariffs on refined copper, the trends of LME copper and SHFE copper will return to their respective supply and demand dynamics. Since early July, LME copper inventories have accumulated by nearly 50,000 mt, with registered warrants still increasing recently. Today's data shows a decline in cancelled warrants, and there is still an expectation of a rebound in LME copper inventories in the future. Domestically, the off-season for consumption continues, and the sharp decline in US copper prices may close the export window, which will further test the resilience of domestic demand. However, it is worth noting that Trump did not rule out the possibility of imposing taxes on copper cathode in the future. Trump stated that he might still impose further tariffs and requested Lutnick to provide an update on the domestic copper market by June 2026. At that time, Trump will assess whether to implement phased universal import tariffs on copper cathode, starting with a 15% tariff from 2027 and a 30% tariff from 2028. Looking back at the US's rhetoric on imposing taxes on imported copper this year, it has been relatively inconsistent. Therefore, it is still necessary to be vigilant about the impact of policy changes on the market. In addition, the US executive order also requires measures to be taken to support the domestic copper industry, including mandating that 25% of high-quality copper scrap produced within the US must be sold domestically. In fact, since the US started wielding the tariff stick abroad, the increase in costs has already led some domestic traders to suspend importing US copper scrap. According to customs data, the US has already begun to exit the ranks of major suppliers of copper scrap to China in the first half of this year, with alternative supplies from Asian countries such as Thailand, Japan, and Malaysia significantly increasing. Although with the pullback of US copper prices, US copper scrap prices may also decline, potentially leading to a rebound in US copper scrap exports, the US's restrictions on copper scrap sales may still limit local copper scrap exports. It is still necessary to monitor changes in the supply of copper scrap import sources in China. (Wenhua Comprehensive)

Recent copper price fluctuations have intensified slightly compared to Q2, with two waves of jumps initially and then pull backs occurring in late June and late July. The first rally was primarily driven by the sustained weakening of the US dollar index and continuous inventory drawdowns in non-US regions, while the second was boosted by domestic anti-"rat race" sentiment. Why have the recent copper price rallies been difficult to sustain? What risks should the copper market watch as the critical tariff period approaches? Global Trade Relations Ease, Limited Boost from Anti-"Rat Race" Sentiment Trade negotiations between the US and other countries continue after the tariff suspension period. As the market had already digested the reciprocal tariffs announced in early April, concerns over economic prospects did not escalate further during this round of talks. Recently, the US high-profile announced trade agreements with Japan, the Philippines, and others, while tensions with the EU shifted toward easing, culminating in an overall framework agreement last Sunday, reducing tariff-related uncertainties. The latest China-US economic and trade talks in Stockholm concluded recently, with both sides agreeing to extend the suspended 24% US reciprocal tariffs and China's countermeasures as scheduled, while maintaining close communication between their trade teams. This outcome aligned with market expectations, further weakening risk-off sentiment. Expectations and policies related to anti-"rat race" measures continued to ferment, coupled with growing calls for industry self-discipline, fueling a surge in related industrial products and significantly boosting optimism in futures markets. SHFE copper prices also saw temporary support. Although the MIIT's key industry growth stabilization plan included non-ferrous metals, only alumina reacted strongly within the sector. Copper's brief strength was more sentiment-driven, with relatively mediocre performance. The reasons: first, US import copper tariff policies this year diverted global copper flows to the US, keeping domestic copper inventories persistently low and alleviating surplus concerns. Second, COMEX copper's early rally and low inventory provided strong price support, keeping SHFE copper hovering near multi-year highs without significant low-price correction needs. Additionally, amid ongoing tight copper concentrate supply and increasing smelter production pressure, the "High-Quality Development Implementation Plan for the Copper Industry (2025-2027)" was jointly issued by the MIIT and 10 other departments in February. The plan outlines key tasks including resource security, technological innovation, structural adjustment, and green-smart transformation. Regarding capacity, it mandates new smelting projects to include proportional equity copper concentrate capacity, effectively tightening new smelting capacity. As the market had already priced this in, copper prices showed limited reaction without further supply tightening signals. Short-term Copper Ore Supply Tightness Unlikely to Ease, Smelter Response Remains Key Following the mid-year negotiations between domestic smelters and Antofagasta, which set the copper concentrate processing fee for next year at zero, CSPT did not set a guidance price for spot copper concentrate processing fees in Q3. Although the recent spot copper concentrate processing fees in China have shown signs of stabilization, the rebound has been very limited. Various signs indicate that the tight supply situation of domestic copper concentrates is difficult to alleviate, and the bargaining power of miners has increased. According to the overseas copper miner production disclosures in Q2 this year, Rio Tinto and Vale increased their production in Q2. However, Teck Resources cut its full-year copper production target, and Kamoa-Kakula, affected by the earthquake, also lowered its production guidance for copper this year. The growth rate of global copper ore supply remains not optimistic. Domestic smelters have been facing the dilemma of extremely low spot processing fees for a long time. However, due to the strong performance of by-products such as sulphuric acid and gold, which have brought additional profits, combined with the majority of acceptable long-term contract processing fees, the refined copper production announced by the National Bureau of Statistics in H1 showed a steady increase, up 9.5% compared to the same period last year. Against the backdrop of no reduction in smelting output, the support of ore supply tightness for copper prices is relatively limited. In July, domestic smelters had fewer maintenance periods, and the capacity utilization rate of newly commissioned smelters continued to rise. The market's concern about large-scale production cuts by enterprises due to losses did not materialize. SMM believes that there is still an expectation for an increase in domestic copper cathode production. However, the long-term contract processing fees negotiated by smelters and miners this year are significantly lower, and even fell to negative values in the early negotiations in mid-year. The pressure faced by smelters will become increasingly severe, and it is still necessary to pay attention to the smelter operation situation in the future. The US Copper Taxation Period May Be Approaching, Global Copper Trade Pattern Begins to Shift This month, the statements of US officials regarding import copper tariffs have shocked the global copper market, mainly due to the significant increase in the proposed tariff rate on copper imports by the US, surging from the previously expected 25% to 50%. At the same time, the implementation period has also been advanced from the expected September-October to August 1st. After the news was released, COMEX copper continued to surge sharply, but LME copper and SHFE copper showed a pullback. The LME copper 0-3 price spread also quickly shifted from a premium to a discount, with the underlying logic being market concerns that the rapid implementation of import copper tariffs would reverse the trade situation of global copper flowing into the US, leading to an increase in copper inventories in non-US regions. Since July, LME copper inventories have indeed reversed the previous de-stocking trend and shown a continuous accumulation, with LME copper inventories rising from around 90,000 mt previously to over 127,000 mt currently in just one month, indicating that some cargoes were indeed unable to be shipped to the US in time and chose to be transferred to LME delivery warehouses. Recently, the US has been busy with trade negotiations with other countries and has reached agreements one after another, without making further statements on the tariff hikes for imported copper. As the original deadline of August 1 approaches, if the tariff hikes are indeed implemented as scheduled and no countries are exempted, given that the US copper imports exceeded 500,000 mt in H1 and the recent window period remains open, the US's annual copper demand will be basically met. Faced with high tariffs and high import costs, domestic demand for copper in the US will weaken, and more copper flowing into consumption areas needs to be guarded against in the future. Recently, the rebound in copper prices has not exceeded the highs set in early July, and the reaction to positive sentiment has been relatively small, with futures prices quickly returning to the previous range of fluctuations. The reason is that although domestic social inventory of copper remains at a low level and difficult to accumulate due to the US's siphoning effect on global copper, the real consumption in the copper market is still constrained by the off-season demand, while ore supply tightness and profit pressures have not yet caused a decline in smelting operations, making it difficult for the supply and demand front to bring more upward momentum. Recently, the US's trade negotiations with various countries are in full swing, and the market's overall concerns about the early stage of the economy have eased. The IMF has slightly raised its global economic growth forecasts for this year and next, and is more optimistic about China's economic prospects. Coupled with the support of "anti-rat race competition sentiment," the macro front atmosphere is moderate. August 1 is an important period related to the US's tariff hikes on copper. As the market has already anticipated this, if the tariff hikes are indeed implemented as scheduled, there may be an increase in copper price fluctuations on that day. However, under the premise that inventory in non-US regions has not temporarily seen a significant increase, there is still support below copper prices. (Wenhua Comprehensive)

Copper is at the core of the American economy. It’s in the wires of our pervasive electronics, in the walls of homes and in the engines of cars. Experts say President Donald Trump’s plan for tariffs on the red metal could stymy the goal of boosting American manufacturing while potentially igniting inflation.

Official statements from the Chilean government and trade figures suggest that the copper import tariffs the US plans to impose could have severe impacts. According to a report from CCTV News Client, on July 9 local time, US President Trump announced on the social media platform "Truth Social" that the US would impose a 50% tariff on imported copper, effective from August 1, 2025. This move stems from a six-month investigation by the US Department of Commerce into the role of copper in national security. The investigation also assessed the impact of foreign supplies on the domestic industry. Chile, which supplies approximately 70% of the US's copper imports in 2024, is at the center of this trade storm. Last year, Chile exported approximately 646,000 mt of copper to the US, valued at over $6 billion. Although China remains Chile's largest copper buyer, the US market is a crucial second export channel for Chilean copper producers. The new tariffs could disrupt these trade flows, putting pressure on Chilean miners and raising questions about the country's trade strategy. US tariffs have already driven copper prices to historic highs. This price surge, which began months before the official announcement, reflects a combination of actual supply deficits and speculative trading. US importers rushed to buy copper before the tariff deadline. From January to April 2025, US copper imports surged by 461,000 mt compared to the same period in 2024. This advance purchasing behavior indicates that market participants are trying to avoid additional costs, but it also suggests potential fluctuations in future inventory adjustments as the new trade environment takes shape. For Chile, the US market accounts for less than 13% of total copper exports, but the impact of the tariffs goes far beyond mere trade volumes. Copper exports remain Chile's largest source of foreign exchange earnings, totaling $50.86 billion in 2024. Affected exports could weaken the Chilean peso, drive up local costs, and reduce government revenue. Last year, Chile's public debt accounted for 42% of GDP, with a fiscal deficit of 2.9%. A decline in copper export earnings could further exacerbate public finance pressures. Chilean officials and industry leaders now face strategic choices. They must weigh the risks of losing the US market against the opportunities of exploring other markets, particularly in Asia and Europe. Uncertainty over tariff details could deter new investments in Chile's mining sector. The issue of US copper tariffs is not just a matter of trade policy. It concerns how a country's decisions can reshape global supply chains, disrupt established markets, and force major producers like Chile to rethink their strategies. The coming months will reveal whether Chile adapts to this new environment or if the tariffs will leave lasting scars on its economy. (Wenhua Comprehensive)

According to SMM, on July 9 local time, US President Trump announced on the social media platform "Truth Social" that the US would impose a 50% tariff on imported copper, effective from August 1, 2025. This move stems from a six-month investigation by the US Department of Commerce into the role of copper in national security. The investigation also assessed the impact of foreign supply on the domestic industry. Chile, which accounted for approximately 70% of US copper imports in 2024, is at the center of this trade storm. Last year, Chile exported approximately 646,000 mt of copper to the US, valued at over $6 billion. Although China remains Chile's largest copper buyer, the US market is a crucial second export channel for Chilean copper producers.

US President Trump's new 50% tariff on copper could throw the US market into turmoil, as major copper trading partners will seek alternative markets. Trump announced the new tariff on copper imports at a cabinet meeting on July 8, but the White House has yet to issue an executive order to implement it. Trump has made tariff policies a cornerstone of his economic and foreign policies, and this copper tariff will be combined with previous 50% tariffs on steel and aluminum, a 10% global tariff on most goods, and "reciprocal" tariffs on individual countries. Even without specific details, Chile and Canada have warned that the US will struggle to fill its domestic supply gap. These two countries collectively supply 86.8% of US copper imports. In a statement on July 8, Máximo Pacheco, Chairman of Codelco, said, "So far, the US has not released any official information, so we are unclear about the specific measures that will be taken. For example, it is unclear whether this tariff will apply to all copper products, including copper cathode, and whether there will be exceptions for countries like ours." "The only certainty is that in 2025, global demand for copper is growing at a rate of 3%, while production is not increasing. To cope with the energy transition, countries around the world, including the US, need more and more copper every day. As the world's largest copper producer, Codelco is and will continue to be a safe and reliable supplier, so we are very calm," he added. Trump announced a national security investigation into copper tariffs on March 18. The results of the investigation have not yet been released. According to data from S&P Global Market Intelligence, US refined copper production was 908,000 mt in 2024, while consumption was 1.62 million mt. A domestic supply gap of nearly 700,000 mt forces the US to rely on foreign supplies. According to data from Market Intelligence Global Trade Analytics Suite, under HS code 7403, Chile accounts for 70.1% of US copper imports. Canada and Peru are also major copper suppliers to the US, accounting for 16.7% and 6.9% of imports in 2024, respectively. According to data from the Mining Association of Canada, the new tariff will have mixed impacts on the Canadian copper industry. "For many Canadian copper producers, it doesn't matter because they sell their products to other markets in Europe and Asia. But for copper midstream companies based in Quebec, it's very concerning," said Pierre Gratton, President and CEO of the association, in a statement on July 9. ""We are waiting for the 232 report, but as usual, President Trump is jumping the gun. We need to figure out what this means, whether our trade negotiations cover copper, and how it will be implemented." Following a meeting between the leaders of the US and Canada at the G7 summit in June, trade and tariff negotiations are ongoing. "The North American copper market is highly integrated, so this will hurt copper producers who sell copper concentrates to Canada and manufacturers who buy refined copper products from Canada," Gratton added. Patricia Barreto, a senior base metals analyst at S&P Global Commodity Insights, said that a 50% tariff on copper imports by the US would "severely disrupt existing trade flows" as exporters would divert shipments away from the US. "This policy could lead to a significant reduction in US copper imports, resulting in a drawdown of accumulated inventory as domestic supply struggles to fill the gap," Barreto said. "Meanwhile, copper that would have gone to the US will flow into markets like China and the EU, helping to ease tightness and replenish inventory outside the US." Hefty tariffs could lead to a significant increase in US copper prices relative to other markets. "US copper prices will continue to trade at a premium to international benchmarks, reflecting both the rise in import costs and the ongoing uncertainty about future supply," Barreto added. "In contrast, global copper prices outside the US could face pressure until redirected supply eases previously tight markets." Trump's announced tariff plan caused copper futures prices on the New York Mercantile Exchange (COMEX) in the US to surge 17.5% on July 8, hitting a record high, before pulling back slightly on July 9. (Wenhua Comprehensive)