U.S. Copper Rush: Imports Flood in and Prices Soar as Trump Tariff Looms
Copper prices surged on Monday as traders anticipated the outcome of potentially high U.S. import tariffs. The three-month copper price on the London Metal Exchange (LME) climbed to $9,925 per metric ton, building on last week’s gains after reaching a five-month high.
As per Bloomberg, Mercuria revealed that around 500,000 tons of copper are now headed to U.S. ports—much higher than the usual 70,000 tons per month. This spike is directly linked to expectations of new tariffs.
Bloomberg: Copper Prices Soar on Trump Tariff Speculation
Bloomberg said that copper futures on the London Metal Exchange jumped 1.9%, crossing $10,000 per ton. In New York, copper prices on Comex climbed 1.4% close to a record high before dropping back.
Since January, Comex prices have surged past international benchmarks as traders bet on U.S. import tariffs. On Monday, the price gap hit a new record of over $1,400 per ton, surpassing February’s peak after Trump announced a Commerce Department investigation into possible tariffs.
Explaining further, this investigation into copper imports is fueling market uncertainty. With new tariffs expected on April 2, traders are remaining cautious. This shift in supply could push prices to record highs while creating shortages in China and other markets.
Reuters highlighted Kostas Bintas, former co-head of metals at Trafigura Group, predictions on copper. He warned that global supplies could tighten sharply. Similarly, Goldman Sachs predicts that U.S. copper imports could rise by 50% to 100% in the coming months as buyers rush to secure material before tariffs hit.
Impact on the Economy
The rush of copper imports and looming tariffs could reshape industries worldwide. Here’s what industry pundits are expecting:
- Record Prices: With 500,000 tons of copper flooding the U.S., prices could surpass $10,000 per ton. This would raise costs for construction, electronics, and electric vehicles.
- U.S. Economic Shift: The government aims to boost domestic copper production, reducing reliance on foreign metals. This could help U.S. mining and manufacturing but also raise domestic costs.
- Higher Inflation: Rising copper prices would increase production costs, leading to inflation across multiple sectors. Consumers already facing high living costs may feel the strain.
- Global Supply Chain Issues: With more copper heading to the U.S., shortages could hit China, the world’s largest copper consumer. This could disrupt industries reliant on steady copper supplies.
- Investment Changes: Companies might stock up on extra copper or look for other materials to avoid the impact of price changes. This uncertainty could lead to more investment in U.S. copper production and new alternatives.
What’s Behind the Copper Crunch?
Experts predict a 320,000-ton copper supply deficit in 2025 as demand outpaces supply. A sharp drop in U.S. copper scrap exports—crucial for a third of global production—is worsening the shortfall.
The U.S. is increasingly relying on imports to sustain the production of copper which is a highly critical metal for EVs, military tech, semiconductors, and consumer goods. Meanwhile, demand is soaring due to the rise of EVs, AI advancements, and renewable energy expansion.
Furthermore, China, setting a 5% GDP growth target, is rolling out stimulus measures to boost domestic consumption, further intensifying copper demand. Copper futures surged 12% as traders speculated that the U.S. might impose tariffs on base metal imports. In response, suppliers rushed shipments to America while tightening supply at other places.
RioTimes revealed an interesting point made by Nick Snowdon, head of metals research at Mercuria. He called this trend an “under-appreciated shock” to global markets.
Amid all these developments, WSJ reported that Rio Tinto plans to expand its copper investments in the U.S. It operates the Kennecott copper mine in Utah and owns a majority stake in the Resolution Copper project in Arizona.
The company sees new opportunities after President Trump signed the executive order to speed up permitting and boost government funding for mineral projects.
Katie Jackson head of the company’s copper business confirmed this news by noting,
“We have a strong desire to invest more in the U.S., particularly in copper,”
Copper Demand and Supply Forecast
Copper demand is set to rise sharply due to the clean energy transition.
IEA projects, cleantech applications, such as EVs and renewable energy, will drive demand from 5,380 kt in 2021 to 16,343 kt in 2040. Meanwhile, traditional uses like construction and electrical wiring will remain stable, reaching 20,036 kt by 2040.
Recycled copper supply will exceed double, from 4,123 kt in 2021 to 10,006 kt in 2040. Despite this growth, mining will still play a key role, with primary supply requirements peaking at 25,249 kt in 2030 before stabilizing.
The rising demand and supply chain concentration, primarily from China, might push for diversified sources and expanded recycling efforts.
BHP, the largest mining company, predicts that copper demand from the energy transition sector will rise from 7% to 23% by 2050, according to a Kitco report.
- Copper demand from the digital sector, including data centers, 5G, and AI, is also set to grow from 1% (current) to 6% by 2050.
- Copper use in transportation will increase from 11% in 2021 to 20% by 2040. This rise is due to more electric vehicles on the road.
On the supply side, BHP highlighted a major challenge. The average copper ore grade has dropped by about 40% since 1991. In the next ten years, half of the world’s copper supply will face problems. Aging mines and lower ore quality will be major issues.
- More significantly, the mining giant estimates that the industry will need $250 billion in new investments to close the growing gap between supply and demand.
BHP’s chief commercial officer Rag Udd.
“As we look towards 2050, we foresee global copper demand increasing by 70% to reach 50 million tonnes annually. This will be driven by copper’s role in both current and emerging technologies, as well as the world’s decarbonization goals.”
The U.S. is rushing to import copper ahead of possible tariffs, but the impact goes beyond supply relief. Higher prices, global supply chain disruptions, and shifting economic strategies could follow. Businesses and investors must stay ready for what’s next.
The post U.S. Copper Rush: Imports Flood in and Prices Soar as Trump Tariff Looms appeared first on Carbon Credits.
