01.08.2025 15:57

The United States has finally clarified its copper tariff policy, revealing a less severe impact than initially anticipated, according to Commerzbank commodity analyst Barbara Lambrecht. This announcement has significantly altered market dynamics.

A 50% tariff, effective August 1st, will apply solely to semi-finished copper products – including items such as pipes, sheets, and rods. Importantly, the tariff excludes refined copper, encompassing cathodes and anodes, a development that surprised many industry observers.

This unexpected exclusion triggered a dramatic market response. The copper price on the Comex exchange plummeted by a considerable 20%, while the New York premium over the London Metal Exchange (LME), previously a substantial 30%, virtually vanished. In contrast, the LME copper price remained largely unaffected.

While some analysts predict potential medium-term price support, several factors complicate the outlook. Firstly, American buyers will continue sourcing copper from the global market. However, preemptive stockpiling in anticipation of the tariffs might lead to temporarily reduced purchases. Secondly, the limited scope of the tariff prevents a flood of unsold copper onto the international market.

Finally, the tariffs are expected to stimulate domestic production of semi-finished copper products within the US, aiming to bolster the nation's smelting industry. However, a potential downside exists: if domestic production costs prove significantly higher than those of traditional suppliers, the tariffs could paradoxically stifle US copper production by reducing overall demand. The long-term effects of this nuanced tariff policy remain to be seen.