Before the 50% tariff on imported copper, higher than expected, imposed by US President Trump takes effect, the pace of copper shipments to the US is expected to accelerate in the coming weeks.
According to Xinhua News Agency, US President Trump said on the 8th that a new 50% tariff would be imposed on all copper imported into the US, but did not disclose the specific date when the new tariff would take effect.
According to CNBC, after the cabinet meeting, US Secretary of Commerce Lutnick said that the Commerce Department had completed its investigation into the status of copper imports, and he expected the new tariff "to be implemented possibly by the end of July or August 1st."
This deadline sets an expiration date for a strategy that has been in place for months, with traders shipping metal from warehouses around the world to the US to take advantage of the premium that was hovering around $2,600 per mt earlier on Wednesday.
With about three weeks left, analysts and traders said only shipments already loaded or from Latin America would likely arrive in time.
"Shipments already on their way to the US may still try to arrive, meaning markets outside the US would not immediately face a surplus," Morgan Stanley analysts said in a report. "But shipping any additional cargo within the three-week window will be more challenging."
A trader said Chilean producers might step up efforts to transfer Comex-compliant inventories to the US.
Analysts and traders said the last-minute rush could mean supplies outside the US would remain tight ahead of the tariff deadline, after which the US's appeal would wane, freeing up supply elsewhere.
JPMorgan analysts said the US had imported nearly a year's worth of copper in the past six months, and imports would decline in the months after the tariff took effect as users digested inventories, they said.
Citi forecasts copper prices outside the US will pull back to $8,800 per mt in the next three months.
However, any decline could be limited by tightness in the global copper market, as demand continues to outstrip supply.
"Copper prices are currently under pressure, but after the US copper tariff is finalised, prices may rebound as fundamentals remain tight in the short term," a benchmark mining intelligence analyst said.
(Wenhua Comprehensive)
