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US President Donald Trump was threatening a 50% tariff on copper imports starting Aug 1, 2025. The on-again, off-again threat of tariffs has evoked a full range of reactions from high anxiety to ennui. Maximo Pacheco, chairman of Codelco, the world's second largest copper producer, was taking a wait-and-see approach, saying it's too soon to draw conclusions three weeks before the deadline. The Copper Journal, one of the most trusted sources for copper information, reported a "profound impact on copper markets. The flow of metal into the US is staggering. Copper held in Comex warehouses has climbed 203,531 mt from 8,936 mt last year to 212,467 mt last week, and this is just a small portion of refined imports. Over the past three months, nearly 740,000 mt have arrived here, and more is on the way in an attempt to beat the Aug 1 deadline." Spot prices for copper on the COMEX, the leading platform for trading futures for metal prices, soared $0.66/lb price to $5.65, the single largest one-day price increase. How this will help American consumers remains a mystery, especially to those who understand metals markets.
As this edition was going to press, U.S. President Donald Trump was threatening a 50% tariff on copper imports starting August 1, 2025. The on-again, off-again threat of tariffs has evoked a full range of reactions from high anxiety to ennui. Maximo Pacheco, chairman of Codelco, the world's second largest copper producer, was taking a wait-and-see approach, saying it's too soon to draw conclusions three weeks before the deadline. The Copper Journal, one of the most trusted sources for copper information, reported a "profound impact on copper markets. The flow of metal into the U.S. is staggering. Copper held in Comex warehouses has climbed 203,531 mt from 8,936 mt last year to 212,467 mt last week, and this is just a small portion of refined imports. Over the past three months, nearly 740,000 mt have arrived here, and more is on the way in an attempt to beat the August 1 st deadline." Spot prices for copper on the COMEX, the leading platform for trading futures for metal prices, soared $0.66/lb price to $5.65, the single largest one-day price increase.
How this will help American consumers remains a mystery, especially to those who understand metals markets. It has already increased the price for copper. At first blush, one would think it's another jab at China, which produces more than 40% of the world's refined copper, but the U.S. does not fully depend on China for copper. U.S. imports of refined copper originate from Chile (65%), Canada (17%) and Mexico (9%), according to the latest information from the U.S. Geological Survey.
Trump has stated publicly that he wants to build a dominant copper industry. That's an admirable goal. Rather than implementing tariffs, the administration should encourage the construction of smelters to produce copper and other metals. The USA has the natural resources, and the administration has demonstrated the ability to accelerate permitting for mines. Even if he had the power to wave a wand and make it so, its' highly unlikely the USA could commission a new smelter before the end of his term.
Equally confusing is the administration's decision to continue to fund the Lo-bito Railway, an infrastructure project that connects copper mines in the Democratic Republic of Congo and Zambia to the Atlantic port of Lobito in Angola. Basically, U.S. taxpayers are reducing the transportation costs for Chinese (Zi-jin) and Canadian (Ivanhoe) copper producers to deliver product to market. It's surprising that DOGE didn't catch this.
At the end of the day, Pacheco's approach is probably best. If it's another head fake from Trump, then it will be a tempest in a teapot for markets. When those warehouses release that excess supply, metal prices could soften, which will lower copper prices for consumers and hurt future investment.
Steve Fiscor, Publisher & Editor-in-Chief [email protected]
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