“The amount of copper pouring into the U.S. is going to leave the rest of the world-especially the biggest copper consuming countries-facing serious shortages. We think something extraordinary is happening in the copper market.” Costas Bintas, a prominent copper trader, warned in an interview that prices could rise by another third as a result of the US tariff storm.
The U.S. is moving fast
There are signs that US ports are about to be flooded with imports of copper as traders scramble to move goods ahead of possible tariffs on the metal imposed by President Donald Trump. Commodities traders including Trafigura, Glencore and Gun Woo are rerouting large amounts of copper destined for Asia to the US, Bloomberg reported. The large volumes have forced traders to book additional storage space in New Orleans and Baltimore to accommodate the shipments, some of these people said.
Mercuria, the energy trader, estimates that about 500,000 tonnes of copper are being shipped to the US, well above normal imports of about 70,000 tonnes a month.
The rush for base metals has led to market chaos, pushing up copper prices in the US. At one point last week, copper futures on the New York Mercantile Exchange were more than $1,400 a tonne higher than in the rest of the world, creating a huge incentive for traders to ship surplus copper to the US.
On March 20, copper prices on the London Metal Exchange rose above $10,000 a tonne, their highest level since October. U.S. Comex Copper Futures are up more than 25% so far this year, and global copper prices have also risen sharply? LME copper is up 12% so far this year.
President Donald Trump last month asked the commerce department to investigate copper imports to address“Threats” to national security and economic stability. “The United States faces significant vulnerabilities in the copper supply chain, with increasing reliance on foreign mining, smelting and refining of copper,” the White House said, the order was seen as a precursor to the imposition of tariffs on copper imports, designed to compete with China’s dominance of the copper supply chain, which has also triggered a rise in prices. On the 20th of this month, the White House announced that it would list copper as a key mineral along with gold.
Signs of a supply shortage are emerging
“The turmoil caused by Donald Trump’s threat to impose tariffs on copper has changed the dynamics of the market,” Bloomberg wrote, this unusual mismatch is causing inventories to flow into the US from non-us markets. “Asia has seen the largest withdrawal of LME inventories since late February, followed by Europe,” said ING Think, financial analytics at the Dutch multinational
In China, the Yangshan Premium-a measure of the extra cost of shipping refined copper-has nearly doubled this month. Meanwhile, in south-east Asia, import premiums have risen to their highest level since April last year. Heavy metal flows into the U.S. could put the rest of the world at risk of supply shortages, Bloomberg quoted bintas as predicting.
Copper, which is highly conductive and relatively cheap, has been used in wires for more than 200 years and is now used in cables, motors, batteries and electronic component for energy conversion, is widely used in electronics, construction and renewable energy and many other industries. With growing demand for electric vehicles and green energy projects, the International Energy International Energy Agency forecasts that demand for copper from renewable energy projects will double by 2030.
At the same time, there is a corresponding shortage of supply. The International Energy Agency warned that the supply gap would increase sharply after 2025 and mining output could struggle to keep up with demand.
The Donald Trump administration’s tariffs are exacerbating the imbalance. In the Shanghai Futures Exchange, copper prices have entered the largest adverse spread in more than a year, the term structure shows a clear downward trend in the far months, and recent contracts are trading at higher prices than forward contracts, indicating tight supply. U. S. copper scrap exports, meanwhile, are running dry. About a third of global copper production comes from scrap, and the flow of scrap tends to act as a market buffer, rising when prices are high and falling when they are low. “Through February, US scrap exports have fallen to negligible levels,” said Snowdon, head of metal research at Mercuria
“The battle for the copper mine.”
White House trade adviser Peter Navarro has accused China of dominating global copper production, but Reuters reports that the major U.S. suppliers of copper include Chile, Canada and Mexico, not China.
As market research firm Wood Mackenzie points out in its report, the Copper Supply Chain is a complex global system covering trade in raw materials and semi-finished goods, its geographical pattern presents the net flow direction of“ and Africa Mining ? China processing and manufacturing”. Lin Boqiang, president of the China Energy Policy Research Institute, told the Global Times on the 25th that this is because from the perspective of the industrial chain, China is at a world-class level in areas such as copper processing, except for a few aspects, the overall advantage is obvious.
Decarbonisation goals and reducing dependence on Chinese metal supplies are inherently contradictory, Wood Mackenzie reports. Governments and manufacturers trying to wean themselves off China’s dependence must look at the whole supply chain, not just the mining links. Replacing Chinese copper processing and manufacturing capacity will require $zero in new capacity, and this inefficient allocation will lead to a sharp increase in the price of end products, ultimately driving up the costs of the energy transition and slowing the process.
China’s relatively small copper exports to the United States mean that any tariffs would have only a modest impact on China, but the potential consequences of American tariffs could have a knock-on effect on global industries. As a big consumer of copper, Lin believes that Chinese companies should actively“Go global” to find high-quality copper deposits and cooperate with local governments and companies to carry out exploration and development. In the future, with the development of AI technology, it may provide assistance in copper exploration and development, but“Going out” is still an important path.