FX.co ★ Copper Rises Toward Record High

Copper futures in the US are currently priced at $5.65 per pound, hovering near the all-time high of $5.70 reached on July 8th. This surge followed President Trump's announcement of a 50% tariff on copper imports. The tariffs will encompass refined metals, including traded cathode, as part of a strategic initiative to bolster the domestic copper industry and reduce reliance on imported refined products. The tariffs are set to be enforced starting August 1st, despite the fact that developing new production capacity is a lengthy process spanning several years. This development has caused the premium for US copper over comparable futures on the London Metal Exchange (LME) to soar to a record 25%. The increase illustrates the tapering of domestic copper stockpile growth as traders have been channeling copper into the US following the tariff threats that surfaced in February regarding base metals. If implemented, the tariff is poised to disrupt domestic supply chains, considering the US imports nearly half of its copper consumption, with Chile being the primary supplier. The country’s refining and smelting capacities, already limited to just two operational smelters, are expected to face considerable strain.