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| Copper Tariffs |
US Copper Importers Slash Orders Amid Tariff Uncertainty
President Trump’s announcement of 50% copper tariffs has disrupted the US copper market. Buyers from Texas to New Jersey have already cut imports sharply. RM-Metals, a key US distributor, reduced its copper purchases by about 25% following the tariff news. This reaction indicates that the copper tariff is drying up demand well before its August 1 implementation date.
US copper prices traded at a premium to global benchmarks for months due to tariff anticipation. However, the high levy has made buyers hesitant to pay extra costs. As a result, many distributors canceled or delayed orders, and existing shipments are likely to sit in stockpiles.
Rising Prices and Stockpiles Cushion Immediate Impact
Copper prices on the Comex exchange rose 38% this year, far exceeding the 10% gain on the London Metal Exchange. This price divergence pushed traders to import copper aggressively earlier, building stockpiles to hedge against tariffs.
Therefore, US manufacturers now rely more on these inventories rather than fresh imports. Comex-certified warehouse stocks reached a seven-year high, providing a temporary buffer for downstream industries such as construction, telecommunications, and electronics manufacturing.
Uncertainty Around Tariff Scope Hampers Business Decisions
Despite the looming tariff deadline, many details remain unclear. Industry players like Aviva Metals face uncertainty about which copper products will be covered—pure copper, alloys, or both. This ambiguity complicates purchasing decisions and supply chain planning.
Moreover, businesses worry about future tariff adjustments. Buyers hesitate to place orders amid fears the levy might be reduced later, raising questions on who bears the cost difference. These factors combined create a volatile market environment, slowing investment decisions in the domestic copper industry.
ScrapInsight Commentary
The 50% copper tariffs have triggered a sharp demand contraction, yet high inventory levels provide short-term relief. However, prolonged uncertainty may delay critical US copper supply chain investments. Market volatility will persist until tariff details and enforcement become clear.
