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| COMEX copper |
The US decision to exclude refined copper from import tariffs triggered a sharp 20% price collapse on COMEX copper futures. This policy shift affects the global copper scrap and refining industries significantly. Meanwhile, semi-finished copper products and copper-intensive goods remain subject to 50% tariffs, reshaping trade flows and stockpiles worldwide.
US Tariff Policy Differentiates Refined Copper and Semi-Processed Products
The White House announced the new tariff structure excludes refined copper cathodes, focusing the 50% import tariff on semi-finished copper products such as pipes, rods, wires, and electrical components. As a result, the most traded COMEX copper futures dropped 19.6% to $4.5235 per pound, marking the lowest price since May. Previously, US copper prices traded up to 28% above London benchmark futures amid fears of tariffs on all refined copper imports.
This tariff differentiation reflects intense lobbying from the US copper industry, which cited insufficient domestic refining capacity to replace all imports immediately. Consequently, the tariff on refined copper removal reverses recent price surges caused by tariff uncertainty and supply race. The decision also avoids stacking copper levies with separate auto import tariffs implemented earlier in the year.
Market Reaction and Global Trade Flow Implications for Scrap and Refined Copper
Analysts expect the exclusion of refined copper from tariffs to significantly alter global trade dynamics. The large copper volumes shipped to the US in anticipation of tariffs have built substantial stockpiles. Now, these stockpiles may be re-exported, as the arbitrage advantage disappears. Michael Haigh, Societe Generale’s head of commodity research, stated, “If cathode is excluded, the arb is over. The market should approach parity again.”
This shift impacts scrap metal traders, refiners, and steelmakers relying on copper feedstocks. The semi-finished copper products still face high tariffs, pressuring downstream industries to seek alternative supply chains or increased domestic production. Overall, the US policy change will reverberate through scrap recycling markets and copper-intensive manufacturing sectors globally.
ScrapInsight Commentary
The exclusion of refined copper from US tariffs will ease immediate cost pressures on domestic refiners but disrupts global scrap flows. Prices are likely to stabilize near global parity, reducing US demand for imported scrap and prompting adjustments in supply chains. This shift underscores the fragile balance between trade policies and the circular economy in the copper sector.
