US copper prices surged to a record high of $5.69 per pound after former President Donald Trump announced plans to impose a 50% tariff on copper imports. While US markets reacted sharply with a 13% price jump on COMEX, global copper prices on the London Metal Exchange (LME) dropped as traders predicted a potential decline in global demand.
The US currently imports about 60% of its copper, with the remainder sourced domestically or from recycled material. Analysts warn that such a steep tariff could significantly impact US consumers and downstream industries like electronics and construction.
Key insights:
- Copper stockpiles on COMEX recently hit record highs in anticipation of tariffs.
- The premium on US copper over LME copper has widened to about 25%.
- Imports scheduled after August 1 may be rerouted to avoid tariff costs.
- Commerce Secretary Howard Lutnick expects the tariffs to be implemented by the end of the month.
Meanwhile, broader financial markets remained relatively calm, with muted reactions from equities and currency markets. Analysts describe the sentiment as “tariff fatigue,” with expectations that the overall US effective tariff rate may end the year near 15%, a potential drag on growth but not enough to cause a recession.
