FX.co ★ Copper Extends Record High Plunge on Tariff Relief

Copper futures in the United States experienced a significant drop, declining by as much as 6% to $5.35 per pound on Thursday. This continued the unprecedented 18% decline from the previous session after President Trump decided to exclude refined copper from the impending tariff package set to commence on Friday. The tariffs will be imposed on imports of semi-finished copper products such as wires and pipes, but will not affect ore, cathodes, and concentrates, which are among the most commonly imported forms of copper into the US.

The recent slump resulted from traders rushing to allocate copper into the US prior to July's end in an attempt to circumvent potential 50% tariffs on copper that included refined products. This anticipation led to shortages in foreign exchanges, driving copper futures to a record high of $5.9 this week. Consequently, the US copper premium over comparable contracts on the London Metal Exchange (LME) surged to a historic high of 30%.

Moreover, the new measures clarified that tariffs would only apply to the copper content in semi-finished products. Additionally, there are now export controls in place to ensure a growing proportion of copper is sold domestically.