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Trump's watered-down copper tariffs almost crush Comex premium

31st July 2025

By: Reuters

  

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BEIJING/LONDON - The once-mighty premium US copper enjoyed over the global benchmark shrank to near zero on Thursday as markets clawed back months of gains in hours of frenzied trading after President Donald Trump surprised markets with pared-back tariffs.

Trump said on Wednesday the United States would impose a 50% tariff on copper pipes and wiring, but the levy fell short of the sweeping restrictions expected and left out copper input materials such as ores, concentrates and cathodes.

The surprise move dragged down Us copper prices more than 18% on the Comex exchange HGc2 and unwound a large part of the premium over the London global benchmark CMCU3 that had grown in recent weeks, with shipments diverted there in anticipation of higher domestic prices.

“We think the LME flips to a premium in the short term due to excess inventories in the US," Anant Jatia, founder and chief investment officer at Greenland Investment Management, a hedge fund specialising in commodity arbitrage trading, told Reuters.

"Over time Comex moves back to a premium as inventories draw and downstream tariffs leave a sustained US premium."

US September Comex copper futures HGc2 continued to slide during the Asian trading day and hit $4.445 a lb or $9,799.4 per metric ton at 05:10 GMT, down 20.4%.

The decline shrank the premium over LME copper to $104, down from recent levels above $3 000.

Benchmark LME copper CMCU3 was down 0.03% to $9 695.5 a metric ton at the same time.

The huge premium had sucked in enormous volumes of copper from around the world this year. As recently as a few weeks ago, traders were still redirecting cargoes to the United States in a rush to get copper into the country before the tariffs.

"What’s a fair price for US copper? At $4.5/lb, it’s already returned to this market’s pre-tariff levels. That seems fair to me," said Panmure Liberum analyst Tom Price.

Trump first teased the tariff in early July, implying that it would apply to all types of the red metal, ranging from cathodes produced by mines and smelters to wiring and other finished products.

Yet in a proclamation released by the White House, the administration said the tariff will apply starting this Friday only to pipes, tubes and other semi-finished copper products, as well as products that copper is heavily used to manufacture, including cable and electrical components.

Edited by Reuters

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