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Tariffs Drive Copper Price Decline and Impact Key Industries
The recent U.S. tariffs on copper-related products have sent shockwaves through global markets, impacting prices and China’s copper scrap imports. Industries such as automotive, home appliances, and copper fabricators are facing the brunt of these trade measures, raising concerns about supply chain disruptions and demand fluctuations.
Impact of Tariffs on Copper Prices
The tariffs, introduced by President Donald Trump on April 2, have led to a sharp decline in copper prices. The London Metal Exchange (LME) three-month copper price fell to $8,105 per ton on April 7, marking a significant drop from $9,721 per ton on April 2. Meanwhile, prices on the Shanghai Futures Exchange (SHFE) plunged to a three-month low of 73,640 yuan per ton from 79,890 yuan per ton over the same period.
Although copper itself is not directly subject to the new tariffs, the downstream industries that consume copper, such as automobile and home appliance manufacturing, are heavily affected. The anticipated reduction in production across these sectors is expected to drive copper demand lower in the coming months.
US Tariffs on Cars and Appliances Affect Copper Demand
A 25% tariff on imported cars and trucks, which took effect on April 3, has already started to impact the automotive sector. Additionally, a further 25% tariff on auto parts is set to be implemented in May. In 2024, the U.S. light vehicle market recorded sales of 16.8 million units, indicating a substantial reliance on imports. These tariffs are likely to disrupt supply chains and dampen copper consumption in the industry.
Similarly, home appliances, which accounted for $23.5 billion in U.S. imports from China in 2024, are expected to face severe price pressures. Cooling devices and electronics, which constituted 23% of global copper demand in 2023, will see a slowdown in production, further reducing copper usage in the sector.
On a positive note, lower copper prices could encourage short-term restocking by copper fabricators. SHFE data indicates a drop in copper stockpiles from 256,328 tons on March 21 to 225,736 tons by April 3, as buyers took advantage of declining prices to secure copper cathode supplies.
China’s Retaliatory Tariffs and Copper Scrap Imports
China’s response to U.S. tariffs includes a set of retaliatory measures targeting U.S. copper scrap imports. Effective April 10, these tariffs will add further pressure on China’s copper supply chain. In 2024, China imported over 440,000 tons of copper scrap from the U.S., representing nearly 20% of its total copper scrap imports.
Despite these measures, some market participants expect traders to circumvent tariffs by sourcing U.S.-origin scrap through third-party countries. U.S. copper scrap exports in February 2025 were already down 10% year-on-year, with China seeing the largest decline in imports. The widening price spread between CME and LME copper has further complicated export options for U.S. suppliers.
Limited Impact on Copper Concentrate and Cathode Supplies
China’s tariffs are unlikely to have a significant impact on domestic copper concentrate and cathode supplies. The country imported just 460,000 tons of copper concentrate and 1,575 tons of copper cathode from the U.S. in 2024, representing a small fraction of its total imports. As a result, disruptions to these supply chains are expected to be minimal.
While the full impact of these tariffs remains to be seen, the global copper market is already experiencing volatility. With both the U.S. and China implementing trade measures, industry participants must prepare for continued price fluctuations and shifts in supply chain dynamics.
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