Copper futures experienced a significant surge following former U.S. President Donald Trump’s decision to launch an investigation into metal imports. This move is part of his broader strategy to protect domestic industries and could result in new tariffs, increasing market volatility and affecting global copper prices.
Copper Market Reacts to Tariff Speculations
The investigation, directed to the U.S. Commerce Department, examines potential import tariffs on copper, leading to an immediate market response. Copper futures on New York’s Comex rose as much as 4.9% before settling, while the price gap between Comex and London Metal Exchange (LME) copper initially exceeded $1,000 per ton before stabilizing around $700.
This probe falls under Section 232 of the Trade Expansion Act, which allows the president to impose tariffs on the grounds of national security. Trump voiced concerns over foreign market influence, stating that the “Great American Copper Industry has been decimated by global actors attacking our domestic production.”
Investor Sentiment and Analyst Insights
Following the announcement, shares of U.S. copper miners surged, with Freeport-McMoRan Inc. seeing a 5% increase in New York trading. Analysts, including Amy Gower from Morgan Stanley, anticipate increased copper deliveries to the U.S. in the short term, citing ongoing uncertainty regarding tariff implementation.
Morgan Stanley analysts predict continued volatility in the price spread between Comex and LME copper, influenced by potential tariffs, China’s budget meeting, and the expiration of Canada and Mexico’s 30-day trade delay.
“If a 25% tariff is imposed on copper imports—similar to previous actions on steel and aluminum—the price gap will likely expand further,” analysts noted in a February 26 report.
Global Copper Supply Adjustments
Meanwhile, global supply remains strained as major copper mines in Chile resume operations after severe power disruptions. Codelco, the state-owned mining giant, has begun restoring operations across its facilities, while major companies like Anglo American Plc and Antofagasta Plc are also resuming production.
With ongoing trade policy shifts and supply chain disruptions, industry stakeholders are closely monitoring these developments, anticipating further fluctuations in copper prices and market dynamics.