By: Natalie Scott-Gray, Senior Metals Demand Analyst, EMEA and Asia region
The short-term fallout from the US’s 50% tariffs on semi-finished copper products was immediate. “The initial market response was an absolute collapse in the US Comex copper prices. So we had an intra day decline falling 22% straight after that announcement on Wednesday”, Scott-Gray noted. While LME copper prices held steadier, the spread between US and global benchmarks evaporated. The US market now faces lingering headwinds as stockpiles build and demand outside the US remains tepid.
Looking ahead, the market could see support as future tariffs on refined copper are considered. “In the proclamation that the White House released, they said that they recommend… phased tariffs coming in on refined copper… 15% in 2027 and up to 30% in 2028”. Scott-Gray points to a slow recovery for domestic US production, keeping supply risks elevated. Globally, LME copper is likely to reflect broader industrial health, with a macro outlook she describes as “tilting slightly bearish” due to policy delays and uncertainty over China’s economy.
China, the world’s biggest copper consumer, is watching developments closely. “With respect to the copper tariffs, though, it’s unlikely they’re going to retaliate just to that. The US market for that semi manufactured material or those copper products is actually very small”. However, broader trade tensions and US rules requiring more scrap to stay domestic will push China to invest more in domestic recycling and seek alternative import sources. Scott-Gray adds, “We do have the possibility that there’s going to be lower yields if it’s lower quality scrap going into China, in the near-term”.
China’s role is central to the outlook for copper. “China produces 69% of refined copper for the world and 58% of demand”. Scott-Gray forecasts another surplus year for China in 2025, with demand from real estate still declining but new sectors like data centers, electric vehicles, and renewables providing offsetting growth. She notes, “We actually expect more than 200,000 tons of copper demand growth year on year just from that sector alone”. Meanwhile, robust grid expansion and steady supply growth will keep the market well-supplied, with risks from mine disruptions and scrap shortages still on the radar.
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