The US China trade war has heated up, and the supply of Chinese copper raw materials has become even worse [SMM Analysis]

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On February 1, 2025, the US government announced a 10% tariff on all Chinese goods imported to the US, citing issues such as fentanyl. As a reciprocal countermeasure, the People's Republic of China will impose tariffs on some imported goods originating from the United States from February 10, 2025. According to the official website of the Ministry of Finance of the People's Republic of China, on April 2, 2025, the US government announced the imposition of "equivalent tariffs" on Chinese goods exported to the United States. The US approach does not comply with international trade rules and seriously damages China's legitimate rights and interests, which is a typical unilateral bullying practice. Starting from 12:01 pm on April 10, 2025, an additional 34% tariff will be imposed on all imported goods originating in the United States on top of the current applicable tariff rate. 2、 The current bonded and tax reduction policies remain unchanged, and the additional tariffs imposed this time will not be reduced. 3、 Goods that have been shipped from the place of origin before 12:01 on April 10, 2025 and imported between 12:01 on April 10, 2025 and 24:00 on May 13, 2025, will not be subject to the additional tariffs stipulated in this announcement. The intensifying tariff war between China and the United States has led to higher than expected tariffs imposed by the United States on China and countermeasures imposed by China on the United States, confirming the concerns of market participants about disruptions to the supply of copper raw materials.

From a data perspective, China imported 460,000 tons of copper concentrate from the United States in 2024, while China imported 28.16 million physical tons of copper concentrate throughout the year. The supply of copper concentrate from the United States to China is not significant. In 2024, China imported 440,000 tons of scrap copper from the United States, and China imported 2.25 million tons of scrap copper throughout the year. However, the United States' supply of scrap copper to China is very significant.

Undoubtedly, the intensification of the trade war has affected the supply of copper concentrate and scrap copper. As of February 2025, China has imported a total of 35,200 tons of copper concentrate from the United States. According to information from the Ministry of Finance of the People's Republic of China, SMM predicts that by April 2025, China will only import 50,000 to 70,000 tons of copper concentrate from the United States, which is the annual import level. Although the trade flow of copper concentrate between China and the United States will decrease, it will not affect the global supply and demand balance of copper concentrate. More importantly, China's local supply and demand balance will further deteriorate. As of February 2025, China imported 70800 tons of scrap copper from the United States. SMM expects that by April 2025, China will import less than 100,000 tons of scrap copper from the United States, which is also the annual import level. Similarly, the reduction in China's scrap copper supply will worsen the supply of copper raw materials in China.

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