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QUOTES-Markets react after Trump announces 50% copper tariff

U.S. president Donald Trump announced on Tuesday that he would announce 50% tariffs on copper imports. This sent U.S. Comex Copper Futures to a record-high of more than 12%.

The announcement marked the end of a long-running arbitrage that had drew metal from the global markets. Prices fell on the Shanghai Futures Exchange and London Metal Exchange.

Here is the reaction of analysts and smelters from Asia.

GOLDMAN SACHES HAS ANALYSTS

As with previous tariffs this higher initial rate of tariff could be used to negotiate, then concessions or exemptions can follow.

We expect an increase in shipments to the U.S. over the next few weeks due to the increased incentive for companies to get ahead of the tariff implementation.

We maintain our Dec-25 LME Copper Price Forecast at $9,700. However, we now see a lower risk of the price rising above $10,000 in the 3Q.

ANALYSTS AT CITI

Our base case now is a headline Section 232 Copper Import Levy of 50%. We adjust our expectations that the COMEX/LME arb will be priced at 25-35% LME, or $2,300 - $3300/t compared to 15-20% previously.

The drawdown of excess copper based in the United States could completely replace the imports of refined copper from the United States for the rest of 2025.

ZHAO YONGCHENG ANALYST BENCHMARK MINERAL INTELLIGENCE

The SHFE copper prices are under pressure at the moment, but will rebound once the U.S. tariffs on copper are finalized. Fundamentals remain tight in the near-term.

The widening differential in price between COMEX & LME will encourage trading arbitrage, preventing the price from dropping more. Overall, the downside risk is higher in near-term."

MATT HUANG ANALYST, BRANDS FINANCIAL

"In the short term, the spot metal market will get a boost: Deliverable metals from South America are in high demand, driving premiums up.

"Chinese holders of physical copper will still be able to rush shipments into the U.S. but the arrivals following them are likely to sit on the sidelines and let premiums slide back." Once the tariff is in place, the 'vacuum of demand' from the U.S. will diminish, and the outlook for LME/SHFE will turn negative.

MARCUS GARVEY HEAD OF COMMODITIES STRATEGY MACQUARIE

The loss of an arbitrageable physical price difference between CME-LME copper will result in a fall in U.S. import demand from the current 200kt/mth to something closer 30kt/mth. This should continue for several months, as excess inventories are reduced in the U.S.

The CME-LME spread would not be required to incentivise marginal spot flows because of the surplus inventories in the U.S.

MICHAEL WU ANALYST SHANGHAI METAL MARKET

There is little time left before the deadline for shipments to the U.S., so shipments from Latin America may be the only ones that can make it."

A CHINESE SMELTER MANAGER

After U.S. tariffs are implemented, copper will flow into China and other countries. Prices will then return to normal fundamentals.

(source: Reuters)