- COMEX copper futures record steepest single-day decline of 20%
- Order requires 25% of high-grade US scrap to be sold domestically
On 30 July 2025, US President Donald Trump signed a proclamation imposing a 50% universal tariff on semi-finished copper products (pipes, wires, rods, sheets, tubes) and copper-intensive derivatives (fittings, cables, connectors, etc.). While initially scheduled for 1 August, the tariffs will now take effect from 6 August.
Key exemptions include copper input materials (ores, concentrates, cathodes, anodes, scrap), which remain tariff-free. These new rules follow a Section 232 investigation citing copper’s strategic role in US defence and manufacturing.
Following the announcement, copper prices crashed, with COMEX copper futures recording their steepest single-day drop of 20%.
Additional highlights
- 25% of high-quality US copper scrap must be sold domestically.
- Starting 2027, a phased requirement will mandate 25-40% of domestically mined/refined copper inputs be sold within the US to boost local refining capacity.
- The administration aims to reduce reliance on foreign copper, particularly from China, and to revitalise the domestic supply chain.
How did the market react?
US copper prices fell sharply after President Trump unexpectedly excluded refined copper products from the newly announced 50% tariffs, catching the market off guard.
On 30 July 2025, COMEX copper futures plunged by nearly 20%, falling from previous highs of about $5.59/lb ($12,330/t) to around $4.47-$4.55/lb ($9,850-10,030/t) — marking the steepest single-day drop on record.
By 31 July, COMEX prices hovered near $4.42/lb (~$9,745/t), a 4% further drop from the previous day and about 12% down over the past month, though still higher than a year ago.
Before the announcement, US copper prices had traded up to 28% above London Metal Exchange (LME) levels due to expectations that all forms of imported copper would be tariffed.
Ahead of the announcement, large volumes of copper cathode were shipped into the US in expectation of the levies, driving domestic copper prices to record premiums over London benchmarks. With cathodes now exempt, those imports appear premature, triggering a market correction.
This move is part of a broader effort by the Trump administration to reduce US dependence on Chinese-sourced critical minerals and boost domestic self-reliance. Currently, the US lacks sufficient refining capacity, relying on imports for about half of its refined copper needs. The country operates only two copper smelters, owned by Freeport-McMoRan and Rio Tinto.
Additionally, the executive order now requires 25% of high-grade copper scrap generated within the US to be sold domestically — a notable shift in trade policy that could impact global scrap availability and pricing.
Outlook
The 50% tariff on semi-finished copper imports is expected to disrupt global copper trade flows, particularly affecting major exporters to the US, such as the EU, Mexico, and East Asia. While refined copper (cathodes) remains exempt, the new rules may lead to price distortions between semi-finished and refined products, driving more demand for cathodes in the near term.
LME copper prices to ease to $9,100/t in 3Q
London Metal Exchange (LME) benchmark copper prices will slide to an average of $9,100/t in the third quarter on a projected easing of US imports and a consequent multi-month destocking cycle in the country, according to research by US investment bank JPMorgan.
JPMorgan projects LME copper prices to average $9,100/t in the third quarter, down from an average of $9,480/t in April-June. The bank expects prices to rise to $9,350/t in the fourth quarter, $9,400/t in January-March and $9,500/t in April-June.
The first half of the year caused a dislocation in the copper market, as front-loading of shipments to the US, following uncertainty around the nature of Trump’s import tariffs.
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