Why U.S. copper tariff exemption won’t fully ease price rises
2025-07-31 14:42:52
Copper bars in storage in the Aurubis AG metal refinery in Hamburg, Germany, on Wednesday, July 16, 2025.
Bloomberg Bloomberg Gety pictures
A major exemption for President Donald Trump 50 % Copper tariff Traders shocked and sent market prices.
the The final ranking On a copper tariff, which the Trump administration says it will enhance the domestic production industry of the account, applies to semi -transferred products such as tubes, bars, leaves and wires. It also affects heavy copper elements such as cables and electrical components. But decisively, the copper cathode does not include raw input materials, copper materials, concentrations, or scraps, as it was widely expected.
However, analysts say it may not be sufficient to avoid the prices of a group of consumer goods that contain metal, from cooking tools to air conditioning units to plumbing parts, where they are pushed up as a result of the definitions.
Cex Prices CME.
American copper prices On Chicago Mercantile Exchange (CME), he was released at a standard level earlier this month, and also hit In addition to the global standard London Metal Exchange (LME), yet July’s first announcement of a 50 % tariff. While importers have already sent in refined copper floods at standard levels during the first half of the year in anticipation of new duties, the size of the 50 % high markets is equal and puts severe upward pressure on the prices of the United States.
Ultimately, the disclosure on Wednesday is a tariff targeting semi -transferred products only has provided another huge shock. In the minutes that followed the news, the Comex Copper (CME futures contracts) decreased by 19 % in the largest decrease during the day, according to England.
The gap between the Comex has been higher than the LME prices about 30 % since the first July 8 announcement, which means continued uncertainty that the total tariff rate will end with 50 %.
However, traders instead were studying the potential exemptions of countries such as the main source of Chile, or to delay the full implementation of the drawings, said Albert McKinsey, copper analyst at Benchmark Mineral Intelligence, for CNBC.
The actual situation is approximately 180 degrees of what was expected and what was priced in CME, which was the definitions of refined copper, and McKinsey continued.
McKenzi said that the deviation sent the CME price premium that decreased from about 2637 dollars at the beginning of Wednesday to only 90 dollars on Thursday morning in Europe, as McKinsey said – he added that a scale of decline appears to be an error had it not been for the context of customs tariffs.
Low price pressure in the United States
While traders were benefiting from prices for prices, part of the massive direction of copper supplies in the United States is that it will take decades so that the country can increase the local mineral production to meet the demand. The United States is currently importing about half of the copper, with two main sources including Chile, Canada, Peru and Mexico.
Deutsche Bank analysts confirmed a “huge shock to the market” this week, noting on Thursday that the Arizona -based MINER shares Freeport-McMORAN – Al -Nahhas company closed the most exposed to definitions on refined copper that raises the prices of the United States – more than 9 % the day before.
“Basically, this does not change the balance of copper supply and demand (it can be said that it improves it due to the risk of destroying the lowest demand), but it is possible that it will put comics under severe pressure.”
They said that it is likely that the LEME land pressure is probably less dramatic, following the massive accumulation in repeated stocks in the United States so far this year. They said that the “Al -Muqtabb” could see high shipments from the United States to the global market, “where the supply has become narrow.
Denkan Wandling, CEO of the giant mining company Anglo -American – which has the main copper operations around the world – I told “Squawk Box Europe” from CNBC on Thursday that although there is a “material dislocation” currently in inventory mode, the basics of the demand for copper “looks great”.
He said: “Through a medium to long -term lens, the basics of copper supports the fact that the demand is still very strong with regard to the need for energy transmission, for the likes of electric vehicles of batteries, for the likes of new energy supply, data centers, and artificial intelligence.” He added that the offer on these long -term expectations remains restricted, amid difficulties in obtaining permits and obtaining the product on the market.
The effect of consumer goods
One of the policies revealed on Wednesday is that the copper tariff will not accumulate over the new Trump duties on car imports, which means that the last rate will only apply to a productive product.
However, Mackeenzie of Mackeenzie of metal minerals indicated that the low American market price premium does not mean that there is no nutrition in consumer products.
“If you are a refrigerator manufacturer, air conditioning units, or even homes, you do not buy copper cathode. You buy wires and other semi -transferred copper products, the things that are targeted. So it is reasonable to assume that the price increase will be reflected in some final goods.”
Ross Bukowski, head of the MasterCam Manufacturing Company.
“Although there are high in stocks of copper in the country, the increase of 50 % on a copper tariff will harm the long -term manufacturers and lead to high production costs,” Bokovsky told CNBC.
“To stay standing on his feet, manufacturers may have to transfer these costs to consumers, which are likely to increase prices on various commodities.”
Michael Reed, chief American economist at RBC Capital Markets, said the impact on consumer prices will be “accurate” as it appears through inputs of other commodities.
“The largest sectors that use copper as inputs include cars, plumbing installations, valve equipment, and communications wires (i.e. service providers, cables and the Internet), and various electrical components. To achieve this purpose, the way in which these products are important – this means, if the car is imported, its copper content will not be extracted.”
“Where we expect to see that it affects the prices of consumers, it will be more than that in the housing/construction sector where copper inputs play a big role for electrical and plumbing wires.”
“But in the context of the total cost of the house, the effect is not as harsh as it may seem 50 % – assuming that the model cost of plumbing and electrical components is $ 10,000, then the full aggressive success passes to the final consumer means an increase in costs to 15 thousand dollars.
– Michael Bloom of CNBC contributed to this story
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