Copper prices tumble after Trump administration excludes refined metal from 50% tariff
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The news: US copper prices collapsed by more than 19%, the largest intraday fall on record, after President Donald Trump excluded the most widely imported form of copper from new 50% tariffs
According to a White House fact sheet published Wednesday (Thursday AEST), tariffs on semi-finished copper products and copper-intensive derivative products like copper pipes, wires, rods, sheets, tubes, pipe fittings, cables, connectors, and electrical components will begin 1 August.
But the proclamation, following a Section 232 investigation Trump ordered in February, also excludes copper scrap, ores, concentrates, mattes, cathodes and anodes.
It also said the levies would not stack with those on cars.
The order also requires that 25% of high-quality scrap produced in the US be sold within the country.
The context: The US relies on imports for a large proportion of its refined copper, due to limited domestic refining capacity. With only two copper smelters, operated by Freeport-McMoRan and Rio Tinto, the US has historically exported copper scrap and concentrates to countries like China for processing.
The numbers: Traders had anticipated broader tariffs, so the exclusion of refined copper cut expectations of gains for domestic producers and sent US copper futures, which had been trading around 28% above London Metal Exchange prices, tumbling after the announcement.
Shares in Freeport-McMoRan, a major US copper miner, dropped more than 8%. Rio Tinto's American depository receipts were 4.82% lower.
The sources: White House, Bloomberg
