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| Refined Copper |
Copper prices rose following the US decision to exclude refined copper from a 50% tariff and supply concerns caused by a deadly accident at Chile’s Codelco mine. These factors have impacted global copper trade and market dynamics significantly.
US Tariff Exemption and Its Impact on Copper Trade Flows
The US government exempted refined copper from new tariffs, causing LME copper prices to rise by up to 1.1%. Meanwhile, US copper futures on CME’s Comex traded about $130 per ton above LME prices. This price gap influences copper shipments, with traders watching whether metal stockpiles will move back out of US ports or remain. Bank of America analysts predict a normalization of price spreads between London and New York markets as trade flows adjust.
Supply Disruptions from Codelco’s El Teniente Mine and Global Smelter Constraints
A tunnel collapse at Codelco’s El Teniente mine, which produces over 350,000 tons annually, halted underground operations and raised supply disruption risks. The duration and impact on Codelco’s output remain uncertain. Meanwhile, global smelters face intense competition for mine supply amid negative treatment fees, plant closures in Japan and the Philippines, and potential output limits in China. Additional disruptions at major mines like Ivanhoe’s Kamoa-Kakula complex are closely monitored by investors.
ScrapInsight Commentary
Copper’s price increase reflects a complex interplay between trade policy and supply risks. The US tariff exemption alleviates some pressure, but mine stoppages, particularly at Codelco, add volatility. Market participants should prepare for continued price fluctuations amid tightening global supply and logistical uncertainties.
