Online Reporter
Trump has threatened to impose a duty of as much as a 25 percent on all copper imports, a move that could roil the global market for one of the world’s most ubiquitous metals, which is used in pipes and electrical cables.
Implementing copper tariffs with such haste would stand in stark contrast to the investigations that preceded steel and aluminum tariffs imposed by Trump during his first administration.
They took some 10 months to complete.
Copper on New York’s Comex rose as much as 3,1 percent to a record of US$5 3740 a pound, before paring some gains to US$5 2925. The benchmark price on the London Metal Exchange fell 1,1 percent to US$10 004 a tonne, widening the gap between the two contracts to more than US$1 700 a ton.
“Copper is rising quickly, especially in New York, to price in the upcoming 25 percent tariffs,” said Xu Wanqiu, an analyst at Cofco Futures Co. “Now the risk is prices will quickly retreat if the tariffs are short of 25 percent,” she said.
The large price differential between London and New York created a worldwide dash among traders and dealers to ship the red metal to America to capture a lucrative premium. Such a move has left the rest of the world, especially top consumer China, short of the metal.
The drop in London copper prices reflects lower expectation of tightness given traders may not have enough time to ship out more metal to the US before tariffs land, said Li Yaoyao, an analyst with Xinfu Futures Co.
“It’s really about, in how many weeks the tariffs will land,” Li said.
The president, in his March 5 address to a joint session of Congress, stirred uncertainty when he sought to defend his tariffs. Trump said he had imposed a 25 percent tariff on foreign aluminum, steel, lumber and copper — a possible slip of the tongue given he only set in motion a formal copper investigation weeks prior.
Analysts at Goldman Sachs Group Inc. and Citigroup in notes to clients have said they expect the US will impose a 25 percent copper tariff by year’s end. – Bloomberg
