Following President Trump’s announcement yesterday of upcoming tariffs on copper imports, a 50% rate now appears probable. While details on timing and scope remain vague, the implication is clear that the tariffs would disrupt both primary and secondary copper flows in the US and globally, with impacts on pricing. Referencing recent tariffs on aluminum and steel, we see likely similar ripple effects for copper. A 50% tariff on primary copper and copper semis would likely push the COMEX copper price significantly higher — potentially widening the spread to LME copper to 30–40%. The existing arbitrage between COMEX and LME prices already reflected market anticipation of trade restrictions. In addition, tariffs of this magnitude would likely prompt reciprocal trade measures from key copper-exporting nations, further complicating copper markets.
Key Impacts on US Copper Market
These tariffs – among others – will trigger two major trends:
- Increased reliance on secondary (scrap) copper over primary material,
- Substitution of copper with alternative materials where feasible.
The impacts could have diverse implications, for example:
Surge in High-Grade Scrap Demand in the US
Demand for high-grade copper scrap (e.g., Bare Brights, No.1) is already elevated in the US. We anticipate further increases in:
- End-of-life (EoL) copper collection,
- Upgrading of lower-grade scrap to high-grade through additional refining,
- Imports of high-grade scrap (assuming scrap will be exempt from the tariffs)
Pressure on Wire Rod Mills
US wire rod mills, which predominantly depend on primary copper as their feedstock, will begin exploring technology solutions to increase scrap ratios in their feedstock — particularly from lower-grade sources given the finite supply of high-grade scrap.
Domestic Recycling Becomes More Viable for Mixed Copper Scrap. e.g. E-Scrap
Tariff-driven price increases might enable previously uneconomical recycling processes — such as e-Scrap recovery — more attractive.
Material Substitution
Copper semis consumers will accelerate efforts to switch to alternative materials (e.g., aluminium, engineered plastics, or other alloys) to mitigate cost pressure.
MM Markets (mm-markets.com) is focused towards the secondary market and also material substitution. We would be pleased to schedule a meeting to discuss the broader implications of these tariffs — for both the US domestic market and global copper flows.
