Who Are the Winners After the Rise in US Copper Semis Processing Fees? [SMM Analysis]

Despite extreme volatility on the copper supply side, downstream consumption in the US showed relative resilience from August to September. While the overall manufacturing sector remained weak, demand from industries such as power, data centers, and EVs remained robust. Grid upgrades, renewable energy projects, and AI-driven data center construction continued to boost cable and copper busbar consumption. EV sales hit record highs, further strengthening structural demand for copper cathode. However, seasonal consumption in home appliances and air conditioners was weak, and high copper prices also prompted some end-users to explore aluminum semis as substitutes, reflecting cost pressures.

Companies swiftly adjusted their strategies. Due to high tariffs on semi-finished products, imports of wires, cables, and copper pipe & tube nearly stalled, prompting domestic producers to shift to importing copper cathode for local processing in the US. US-based manufacturers like Southwire and Cerro Wire seized the opportunity to raise prices by about 5%, leveraging tariff barriers to secure higher profits. Prysmian also noted that its US factories would significantly benefit from restricted imports of semi-finished products. The US copper semis processing industry emerged as the big winner of the tariffs.

Market sentiment shifted from panic to caution. Extreme price spreads in July triggered "panic stockpiling," but after policy implementation, prices pulled back, and sentiment turned cautious. While digesting inventories, traders tentatively resold some excess imported copper. Smelter exports declined, and some bonded copper flowed back into the global market.

Looking ahead, for the remainder of 2025, the US market is expected to maintain a destocking trend with sluggish import demand. The global supply chain, disrupted by US stockpiling, is likely to gradually recover in the coming months. Medium and long-term, if the US imposes tariffs on copper cathode itself by 2027, it could trigger another market shock. For now, a new normal of "high inventory, low imports, and resilient demand" has emerged, with local processing enterprises becoming the primary beneficiaries of tariff advantages.