Major companies in the US copper metal industry have urged President Trump not to impose tariffs on copper imports, but instead to boost domestic production by restricting the export of copper ore and copper scrap. In February, Trump signed an executive order directing the US Department of Commerce to conduct a "Section 232 investigation" on US copper imports, indicating that the "tariff stick" might be aimed at imported copper. This move disrupted the global market, causing US copper prices to significantly premium over the international benchmark LME copper prices, and triggered a global "copper rush" as companies raced to ship copper to the US before potential tariffs took effect. In the public comment period of the Section 232 investigation conducted by the US Department of Commerce, mining giant Rio Tinto Group, copper wire manufacturer Southwire, and trader Trafigura Group all recommended that the US government should restrict copper exports rather than impose tariffs on copper imports. Rio Tinto wrote in its feedback, "The Trump administration should consider export restrictions on domestically produced copper concentrates and copper scrap." Southwire pointed out, "The government should focus on regulatory reforms and restricting US copper exports as the primary means to promote the development of the US copper industry." It is understood that the US is the world's largest exporter of copper scrap and also exports copper ore. However, due to insufficient domestic refining capacity, US companies still need to import a large amount of refined copper metal. Therefore, they hope that Trump will not impose import tariffs on copper metal. Trafigura Group believes that potential tariffs should target copper finished products, such as copper wire, copper pipe & tube, and copper strip. The world's largest copper trader also recommended that the US government "temporarily exempt refined copper imports from tariffs until new mining and smelting capacities are built." US copper miner Freeport-McMoRan did not make specific recommendations on tariffs, but the company emphasized that the US should support free trade, "Promoting free and fair trade with US allies will ensure that US copper supply needs are met." Freeport-McMoRan wrote in its survey feedback, "In 2024, the US imported about 50% of its copper cathode demand from Chile, Canada, Peru, and other countries, which is necessary due to the lack of potential production capacity in the US." US companies also proposed a series of recommendations to support the development of the US copper industry, including introducing tax credit policies, simplifying the permitting process for new mines, and imposing tariffs on semi-finished products with higher copper content. Many companies pointed out that one of the biggest current challenges is how to encourage investment in new smelting capacity. There are currently only three copper smelters in the US, one of which, the Hayden plant, is in a shutdown state. The plant's owner, Asarco LLC, requested in its submission to relax emission detection requirements to enable the restart of production.

On Tuesday, April 8, a senior executive from Antofagasta in Chile stated that the trade disputes triggered by US tariffs have increased the risk of metal demand, but he anticipated that artificial intelligence and other technologies might offset any traditional consumption losses caused by economic weakness. He also mentioned that the US government's policies could create a more favorable environment for mining investments. The tariff hike announced by the US last week has already caused fluctuations in financial markets and driven a sharp decline in copper prices. Ivan Arriagada, CEO of Antofagasta, previously stated in an interview that he expects the supply of copper needed for construction and the transition to a low-carbon economy to remain limited. This means he is more concerned about the impact of trade disputes on the broader economy rather than the resilience of the copper market itself. Trade disputes could ultimately reduce the demand for copper. Arriagada noted that if a global economic slowdown undermines the demand for copper in construction and infrastructure, he expects the use of data centers, renewable energy, and artificial intelligence to fill this gap. The US has not yet announced specific measures for copper but is studying potential tariffs. Arriagada stated that as the world's largest copper producer, Chile is in a favorable position to avoid US tariff hikes because the US has a trade surplus with Chile, and Chile is a free trade partner of the US, providing over half of the US copper imports. London-listed Antofagasta operates four copper mines in Chile and is developing one in the US. The company aims to produce between 660,000 and 700,000 mt this year, after producing 664,000 mt last year. The Twin Metals copper-nickel mine project in Minnesota needs to resolve litigation related to permits before obtaining the necessary approvals. Arriagada mentioned that before the US announced its tariff decision last week, US customers stockpiled goods in various sectors, but Antofagasta only supplied a small additional amount of copper to the US, without disclosing the specific quantity. For more updates on the copper industry chain, you are welcome to attend the CCIE 2025 SMM (20th) Copper Industry Conference and Copper Industry Expo, hosted by SMM, which will be held grandly in Nanchang, Jiangxi from April 22 to 25, 2025. Over 3,000 industry elites, representatives from upstream and downstream enterprises of the copper industry chain, government officials, industry associations, third-party equipment, logistics and warehousing, and academic experts will gather together. The conference covers mines, smelting, copper processing, trade, recycling, and end-use applications, encompassing the entire copper industry chain. At the event, more than 100 exhibitors will showcase the latest copper processing and smelting equipment, high-quality raw material suppliers, and new-type copper-based materials, highlighting the innovation and vitality of the copper industry. The conference features a variety of exciting activities: the main forum focuses on global copper market trends, raw material supply, policy impacts, and market directions. Sub-forums delve into specific areas such as electrical power transmission and distribution, secondary copper, copper-based new materials, hardware and plumbing, and ESS, exploring industry hot topics. During the conference, there will also be a two-day field trip to 12 representative enterprises in the copper industry, with a cumulative production of 1 million mt, sharing cutting-edge technologies and valuable experiences to promote the upgrading of the copper industry chain and drive high-quality industry development. The CCIE 2025 SMM (20th) Copper Industry Conference and Copper Industry Expo will help you grasp industry trends, expand your network, and seek business opportunities! SMM cordially invites you to gather in Nanchang, Jiangxi from April 22 to 25, to unite in the new era and jointly plan for new development!

This Qingming holiday was not peaceful. The overseas copper market experienced a sharp decline under the impact of tariffs, with LME copper falling by 8.95% and COMEX copper dropping by 10.21%. With the implementation of the US "reciprocal tariffs," China quickly introduced countermeasures. How will this tariff storm affect the global market? Specifically, what direct and potential impacts will it have on the copper market? Against the backdrop of a market-wide decline, how should copper market participants respond? Futures Daily reporters interviewed market veterans for timely analysis and in-depth insights on these issues. How to view this copper price crash? "In the past 15 years, copper has only experienced larger single-day declines in March 2020 and October 2011 during the European debt crisis. Compared to the pre-holiday closing price in China, LME copper fell by nearly 9%, hitting a new low for the year." Xiao Jing, chief analyst of non-ferrous metals at SDIC Futures, believes that this sharp decline is a systemic risk event impact, not a financial crisis. From the key real economy indicators of major economies, there is no sign of an economic recession yet. The market is more concerned about the uncertain risks and fundamental challenges posed by the tariff war to the global economic order and trade stability. From the current market performance, Wang Yunfei, head of the investment consulting department at Shandong Gold Futures, told reporters that as of April 3, the main liquidity indicators of the market have not tightened. Therefore, the market is still in the stage of sentiment fermentation, and the actual impact has not yet arrived. Large-scale reciprocal tariff hikes may affect the current fragile global demand in terms of confidence. If the prices of major assets continue to fall, once reaching a certain scale, it may trigger further chain reactions, thereby accelerating a global economic recession. In the view of Ji Xianfei, a non-ferrous metals analyst at Guotai Junan Futures, the main logic of the current market lies in the impact of Trump's tariff hikes, leading to a general pullback in risk asset prices. The continuous sharp decline in US stocks will also affect the stock markets of other countries to varying degrees. Investor confidence is dampened, and market panic is spreading, increasing the uncertainty of future global asset prices. Currently, the market is more concerned that the US tariff hikes and the countermeasures by the economies subject to these tariffs may lead to an increase in global trade barriers and may also trigger adjustments in the global trade landscape. How will this tariff storm affect the global market? "Historically, the US has experienced a period of imposing high tariffs on most goods, and it lasted for a long time." Xiao Jing introduced that in 1930, the US implemented the Smoot-Hawley Tariff Act, significantly increasing tariffs on all imported goods, which led to retaliation from countries around the world, the prevalence of protectionism, and the worsening of the global economic crisis. The sluggish economic environment highlighted the drawbacks of high tariffs. Since the end of World War II, the world has gradually entered the current trade landscape dominated by the US. This time, Trump's "reciprocal tariffs" plan quickly raised the US tariff level to the highest since World War II. Buffett once stated in a previous interview that "tariffs are equivalent to an act of war." Several US investment banks have raised the probability of a US economic recession this year, and there is a significant divergence in the market's expectations for the pace of the US Fed's interest rate cuts. Global mainstream assets, including gold, have reacted with a consistent rapid decline. This week, the Nasdaq index has entered bear market territory. Silver, which had been stagnant, even with industrial demand accounting for half, experienced a weekly decline of 11.6%, and the gold-silver ratio rose to the highest level since May 2020. Xiao Jing stated that Trump is using tariffs as a weapon of extreme pressure, and the market needs to pay attention to the reactions of various parties around the US "reciprocal tariffs." Extreme tariff risks will inevitably affect the global economy, and attention should be paid to whether domestic countermeasures will be introduced. What direct and potential impacts will the copper market face? In Wang Yunfei's view, this tariff storm has suppressed the short-term and medium-term demand expectations for the global copper market. In the context of accelerating deglobalization, commodity demand is expected to decrease, which will be bearish for copper prices. In terms of potential impacts, the risk of a global economic recession is increasing. Even if market sentiment stabilizes in the future, the deteriorating trade environment will not be conducive to the recovery of investment and demand in the long run. Ji Xianfei believes that under the impact of the unexpected tariff storm, risk assets have generally fallen, leading to a shrinkage in social wealth, a decline in US and global consumption, and a drop in corporate profits, thereby forming a negative feedback loop of falling prices and declining consumption. From the perspective of copper consumption expectations, the marginal growth points of global non-ferrous metal consumption are mainly in Southeast Asia, China, and the US. The US tariffs on Southeast Asia and China will weaken the previous consumption expectations, and the global copper consumption growth rate may be adjusted downward, changing the previous expectation of tight supply. Xiao Jing believes that under the impact of systemic risks, copper has turned into a risk asset. After the overseas copper price, which had been bullish with concentrated long funds, was hit by tariffs, a "long killing long" scenario emerged. The tariff game has triggered anxiety about an economic recession, thereby threatening overall copper demand. "If extreme tariffs become a fact that must be acknowledged for a period, the export demand for domestic machinery, integrated circuits, metal products, etc., will be dragged down, and the demand growth rate will be revised downward. The US economy will face considerable uncertain risks." How should copper market participants respond? "Compared to the overseas copper price decline of about 10%, the domestic SHFE copper futures have a daily limit of 7%, and there is a certain risk of hitting the limit down after the holiday opening." Xiao Jing stated, but unlike the overseas market, the domestic market is in the peak consumption season, supported by real demand. As copper prices fall rapidly, the previously hesitant pricing orders under high copper prices will take action. In Ji Xianfei's view, it is currently difficult to assess future copper prices, especially since market sentiment has reached an extreme low. It is hard to decide whether to make a trend-following or contrarian valuation, and it may be necessary to wait for the sentiment to ferment in the next few days before making a valuation. "Due to changes in tariff policies, the current copper price volatility risk has intensified, and fund management in hedging has become more important." Wang Yunfei suggested that companies should reasonably plan the scale of their positions or use option tools to control risks in actual transactions. Looking at the supply side, Xiao Jing believes that the game between the mine and smelting sectors has not yet seen a turning point, and the processing fee is still in the negative zone and continues to decline. In Q2, attention should be paid to whether the processing fee can hit bottom. In terms of secondary copper, the US is China's largest importer of copper scrap, involving 400,000 mt of copper import resources. In March, copper prices surged, and the price spread between refined copper and copper scrap did not widen significantly, making the secondary copper line even tighter. In addition, US copper imports are temporarily exempt from "reciprocal tariffs," and physical logistics still have about a quarter for arbitrage transfer. LME copper inventories will continue to decline, and there is also an expectation of re-export domestically. Therefore, domestic social inventories will continue to flow out. Compared to the overseas market, SHFE copper may mainly experience a resistant decline. Overall, she believes that fundamental factors may support SHFE copper futures to open the limit down on the first trading day after the holiday, providing some liquidity to the market. Looking ahead, Xiao Jing suggested continuing to monitor the progress of the tariff storm. After the real economy indicators are actually affected by the tariff impact, and the domestic peak consumption season turns weak or destocking becomes difficult, the domestic copper market will gradually transmit from weak consumption to upstream supply. At that time, copper prices may experience a larger downward adjustment. She believes that copper prices below $8,000/mt are strategically attractive for purchasing. As for futures strategies, if there is a short-term low opening, it is temporarily not recommended to enter new short positions. In the case of a sharp decline in copper prices, the backwardation structure may benefit from spot supply and demand and widen. To learn more about the dynamics of the copper industry chain, you are welcome to attend the CCIE 2025 SMM (20th) Copper Industry Conference and Copper Industry Expo, hosted by SMM, which will be grandly held in Nanchang, Jiangxi from April 22-25, 2025. CCIE 2025 SMM (20th) Copper Industry Conference and Copper Industry Expo ~ Over 3,000 industry elites, representatives of upstream and downstream enterprises in the copper industry chain, government department leaders, industry associations, third-party equipment, logistics and warehousing, and university research experts will gather together. The conference covers mining, smelting, copper processing, trade, recycling, and end-use applications, encompassing the entire copper industry chain. At the conference, more than 100 exhibitors will showcase the latest copper processing and smelting equipment, high-quality raw material suppliers, new-type copper-based materials, and other cutting-edge achievements in the copper industry, fully demonstrating the innovation and vitality of the copper industry. The conference activities are exciting: the main forum focuses on global copper market trends, raw material supply, analyzes policy impacts, and interprets market directions. Sub-forums delve into industry hot topics around electrical power transmission and distribution, secondary copper, new copper-based materials, hardware and plumbing, and ESS. During the conference, there will also be a two-day field trip to visit 12 representative enterprises in the copper industry with a cumulative capacity of 1 million mt. Sharing cutting-edge technologies and valuable experiences to help upgrade the copper industry chain and promote high-quality industry development. CCIE 2025 SMM (20th) Copper Industry Conference and Copper Industry Expo Helps you grasp the industry pulse, expand your network, and seek business opportunities! From April 22-25, SMM cordially invites you to gather in Nanchang, Jiangxi, to unite in the new era and jointly plan new developments!

Market Sentiment: Last week, copper prices hit a high and then retreated, with the market still following the pace of US copper futures. The new US President indicated that copper tariffs might be implemented within weeks, causing the US-LME price spread to rapidly widen to $1,700, and the market adjusted its view on copper logistics. Currently, the new US President and various institutions still hold conflicting views on tariffs, and the market is sensitive to the reciprocal tariffs set for April 2. Logistically, if tariffs are implemented within weeks, the US will struggle to fully complete its stockpiling scale, and the effective increase in domestic copper production is measured in "years." Subsequently, the US will primarily consume its copper inventories. If the tariffs are implemented as previously expected within the year, the scale of US copper imports could indeed increase by 400,000-500,000 mt compared to the past. US economic indicators still reflect "stagflation," with the preliminary March manufacturing PMI falling below expectations to under 50, February corporate equipment orders declining for the first time in four months, weak consumer confidence, and February core PCE slightly exceeding expectations. The market continues to lower its expectations for US economic growth. In contrast, Europe's March manufacturing PMI rebounded, while China's remained stable and expanded to 50.5. This week, the market is focused on US employment data, durable goods orders, and factory orders. Domestic Supply and Demand: Macro consumption still reflects the characteristics of the peak season, with March manufacturing PMI new orders continuing to rise. Short-term copper prices adjusted, but looking back at March, SHFE copper weighted cumulative gains exceeded 5,000 yuan/mt, and the total open interest in the market quickly surpassed 600,000 lots. Compared to last year, midstream and downstream acceptance of high copper prices at 80,000-81,500 yuan/mt was relatively smooth. Combined with the futures market, prices of 82,500-83,000 yuan/mt have some suppression on consumption, and the short-term decline in social inventory slowed, with SMM social inventory dropping to 337,200 mt on Monday. However, it is worth noting that fluctuations in the Shanghai-Guangdong price spread are driving logistics southward, with Guangdong inventory temporarily flowing in, and Guangdong premiums dropping from a high of 225 yuan/mt in late March to 10 yuan/mt, while Shanghai copper turned to a premium of 15 yuan/mt on Monday. Apart from the significant price advantage of sulphuric acid, domestic refinery output in April is expected to decline MoM due to maintenance impacts. In terms of open interest, the high open interest background has not been fully vented, which is the main reason for the objective view that copper prices still have the potential to rise further. In the long-term theme, the current inflection point is mainly inclined towards the transition period between April and May. Overseas News: Mine supply remains key, with Q2 domestic refinery TC long-term contract negotiations stalled. Chile's Codelco indicated it would shift more spot copper sales to the US. In terms of institutional attitudes, Citi lowered its three-month copper price forecast to $9,500, expecting the average copper price in H2 to be $8,800; BNP Paribas believes copper prices may fall to $8,500/mt in Q2. The earthquake in Myanmar may affect copper production in Sagaing Region, but current attention is limited. The market is still waiting for clearer information on mine increments and the impact on TC after the resumption of operations at mines in Indonesia and Panama. Outlook: SHFE copper's adjustment time is short, and the extent of the pullback is likely to be limited under peak season pricing demand, with SHFE copper's pullback this week expected to be limited to 79,700-80,000 yuan/mt. Technically, LME copper's current support is at $9,700. Midstream and downstream players should price on demand during pullbacks. (Source: SDIC Futures)

Recently, the daily performance of SHFE copper has not been outstanding, but the futures price has been steadily climbing, continuously refreshing its stage highs, and is now not far from its historical peak. What has enabled copper prices to be so stable? Is the "engine" behind it still powerful? The US Tariff Hike Expectation on Copper Continues, Driving Domestic Market with Strong US Copper Performance The anticipation of the US imposing tariffs on imported copper can be traced back to early February, when the US announced plans to impose a 25% tariff on steel and aluminum products, sparking market expectations that the US might subsequently impose tariffs on copper. This would increase the import cost of US copper and potentially push up US inflation. As a result, US copper prices have been significantly stronger than LME and SHFE copper prices, although the market initially expected the tariff rate on copper to be around 10%-15%. Later, the new US President signed an executive order directing the Department of Commerce to investigate whether copper imports and foreign copper production pose risks to the US economy and national security. Some officials hinted that the US tariff on copper could reach 25%, significantly higher than previous expectations, which would further increase future copper import costs. The center of US copper prices continues to rise, and the premium over LME copper has recently stabilized above $1,000. Mid-week, there were reports that the US government is rapidly conducting a review, and the US might impose tariffs on imported copper within weeks, several months earlier than expected. The US copper rally reignited, hitting a high of $5.374, a record since its listing, and the premium over LME copper also reached a historical high. The exceptional strength of US copper has created more arbitrage opportunities and boosted SHFE copper prices. Additionally, in anticipation of potential high tariffs, copper from around the world has been flowing into the US recently, leading to a continuous decline in LME copper inventories and persistently high cancellation rates. Meanwhile, domestic refined copper exports in February showed signs of recovery, which might reduce domestic supply and also support SHFE copper prices. Currently, the premium of US copper over LME copper remains high, indicating that the market is still trading on related expectations. However, the recent pullback in US copper prices suggests that as the tariff policy approaches implementation, market divergence has increased, and uncertainty has also risen. Caution is needed regarding the potential impact of sentiment pullback and possible expectation gaps after the policy is implemented. Tight Ore Supply Extends to Smelting Sector, Focus on Domestic Smelter Operations During Maintenance Season The long-term contract processing fees agreed between domestic smelters and overseas miners at the end of last year were only slightly above $20/dmt, already hinting that the tight supply of domestic copper ore would continue this year. From the production guidance of major overseas miners for 2025, the new copper ore production is also lower than previous expectations. Since the beginning of this year, the spot processing fees for domestic copper concentrates have continued to decline, falling into negative territory in early February and failing to stabilize, instead continuing to drop, recently reaching below -$20, repeatedly setting record lows. Under such extremely low processing fees, domestic smelters face increasing production pressure, and the profits from long-term contract benchmarks are also very limited, exacerbating the difficulties for smelters. Mid-month, news from Tongling indicated that its smelters have taken measures such as production cuts, early and extended maintenance, and unplanned major repairs, leading to expectations of reduced domestic refined copper supply, which once boosted copper prices. Recently, there have been many disruptions in the ore sector. Early last week, Freeport Indonesia announced that it had obtained an export permit for 1.27 million mt of copper concentrates, and further attention is needed on whether Indonesian copper ore exports to China will increase. The restart of First Quantum's Cobre Panama mine, which the market is closely watching, remains difficult. Regardless, as of now, the negative spot processing fees for copper concentrates continue, and Q2 is traditionally the period for concentrated maintenance of domestic smelters. Further attention is needed on the trend of processing fees and the maintenance schedules and production arrangements of other smelters. If more supply disruption news emerges, copper prices will still have upward momentum. Compared to domestic smelters, overseas smelters have higher costs, and some companies are facing tight cash flow. Recently, Glencore announced that its Altonorte smelter in Chile has declared force majeure on copper shipments, and it is reported that the smelter has suspended production. Chile is one of the main sources of US copper imports, and with global copper flowing into the US, supply disruptions from Chilean smelters could lead to tighter copper supply and demand in other regions. Domestic Refined Copper Social Inventory Declines, but the Pace of Decline Slows "Golden March and Silver April" is traditionally the peak demand season for the domestic copper market, and with recent favorable domestic policies and a stable start to the national economy, as an industrial base metal, domestic refined copper social inventory has been continuously declining since early March. Along with the continuous rise in copper prices, the decline continues, and current social inventory levels are lower than the same period last year. However, it is worth noting that the decline in inventory is not only due to downstream rigid demand but also to increased exports from smelters. As mentioned earlier, overseas copper prices have been relatively stronger than domestic prices recently, and there is a trend of copper flowing into the US, leading to increased export momentum from domestic smelters. Therefore, the decline in inventory cannot be entirely attributed to robust downstream demand. Recently, SHFE copper has been on a continuous upward trend under multiple factors, with futures prices steadily breaking through the 80,000 yuan mark. High prices have made downstream procurement more cautious, and spot prices have shifted from a slight premium to a slight discount, with the price difference between primary metal and scrap widening, potentially increasing the substitutability of copper scrap consumption. The latest institutional data shows that the decline in domestic refined copper social inventory has slowed, and even SMM data shows a slight increase in social inventory compared to Monday. The acceptance of high prices by downstream companies still needs attention. Overall, the expectation of the US imposing tariffs on imported copper has made US copper prices exceptionally strong, greatly driving SHFE copper prices. The copper market's own supply and demand fundamentals also provide strong support, with tight ore supply already affecting smelters, and downstream demand remains resilient during the peak season. Copper prices have been steadily breaking through. Now, as the tariff policy is about to be implemented, market uncertainty has increased, with US copper prices consolidating at high levels and SHFE copper prices pulling back. However, unless the US tariff on copper is significantly lower than expected, copper prices are still more likely to rise than fall.

[SMM BC Copper Commentary: US Dollar Index Plunges, Boosting Copper Prices; BC Copper Most-Traded Contract Surges] SMM reported on March 6: Today, the most-traded BC copper 2504 futures contract opened higher and moved upward, starting at 69,430 yuan/mt. It closed with a bullish candlestick, with the upper shadow piercing the upper Bollinger Band...