Quick Bite – Copper Surges on Trump Tariff Fears
Copper futures surged to record highs above $5.8 per pound on 8 July, before retreating to around $5.5/Lbs, after President Trump announced plans to impose a 50% tariff on copper imports. The move is aimed at bolstering domestic production and reducing reliance on foreign supply as the US currently imports nearly half of its copper, with Chile as the primary source. The new tariff brings copper in line with existing 50% duties on steel and aluminium, further escalating trade tensions and fueling volatility in the metals market.
Source: FT
US Commerce Secretary Howard Lutnick confirmed that the investigation into copper imports had concluded, and said he expected Trump to sign a formal proclamation by the end of July. Traders expect the higher premium will attract more shipments into the US in the short term, potentially tightening global supplies and exacerbating market imbalances.
Copper prices over the Last Month (LHS), and over the Last 10 Years (RHS)
Source: Trading Economics
What is copper used for?
Copper is used in manufacturing everything from automobiles to mobile phones to computer chips. Apart from silver, copper is the next best conductor of electricity. Copper’s superior conductivity allows smaller conductors to be used, saving space and cost. Copper has a 100% conductivity rating. In comparison, metals like aluminium have only 61% of the conductivity of copper.
Copper is extremely durable and can maintain its integrity for years. Its malleability allows it to be formed and processed into unique shapes and sizes. Copper can remain intact after being worked. Consumption surged in recent decades as China urbanised and modernized, and in construction projects, it conveys both electricity and water in wires and pipes.
Copper has gotten a huge boost from the growth in renewable energy production and the boom in data-centre construction. As an example, a typical 3 MW onshore wind turbine can contain around 4.7 tons of copper, while offshore turbines can require up to 8 tons of copper per megawatt of generating capacity.
The thinking behind Trump’s Tariffs
The Commerce Department in recent months has been probing potential threats to American copper supplies under the Trade Expansion Act, which allows tariffs to be applied on goods considered essential for national security. Until this last week, though, Trump hadn’t specified how steep copper tariffs would be. The US has ample copper reserves, the White House said, but “our smelting and refining capacity lags significantly behind global competitors.” The administration said it aims to ensure the US maintains a resilient supply chain for the metal.
Who produces copper? Which countries export to the US?
The US last year imported nearly half of the copper it consumed, with most of those shipments arriving from Chile and Canada.
Source: Goldman Sachs
On the global stage, however, Beijing has increasingly dominated the supply chain. Between 2019 and 2024, China invested nearly half of the $55 billion committed to new copper mines globally, according to Wood Mackenzie, which estimates that China accounted for 75% of worldwide smelter growth since 2000.
Australia is the world’s eighth-largest copper producer. In 2023, Australia contributed 4% of global copper output, which was a 2% increase compared to 2022. While Australia holds a significant portion of the world’s copper reserves, its production is outpaced by other major producers like Chile, Peru, and the Democratic Republic of Congo.
How expensive is copper?
While domestic manufacturers and traders have awaited copper tariffs, they have snatched up seaborne shipments to stockpile the metal. That surge in demand has made copper the world’s hottest commodity and pushed US prices far higher than their global peers.
US copper futures last week were 23% more expensive than a year ago, closing at $5.64 a pound, whereas in London, futures recently changed hands around $4.44/Lbs.
Copper v Gold – Historic correlation has diverged sharply over last 3 years
Source: Bloomberg
What does it mean for US markets?
Copper has long been seen as a key bellwether for economic growth, with higher prices usually signalling industrial expansion – hence its nickname, Dr Copper. But analysts now fear that tariff-induced price hikes on metals and other imported goods could boost US inflation, which remains elevated above the Federal Reserve’s 2% target.
Higher costs could hit the profit margins of US companies that need copper to build infrastructure or manufacture other products. At the same time, jumping commodity prices are a boon to domestic mining firms.
Australian copper producers
Below is a list of the top 10 ASX-listed Australian copper producers for the 2023/4 financial year (July 2023 to June 2024), ranked by their annual copper production. Note that some companies operate mines outside Australia, but only those with significant Australian operations or ASX listings are included. These figures are estimates only, and should not be relied upon.
Top 10 ASX-Listed Australian Copper Producers (FY23/24) – Estimates Only
- BHP Group Limited (ASX: BHP): Production: ~1,703,000 tonnes (1.7 Mt)
- Rio Tinto Limited (ASX: RIO): Production: ~690,000 tonnes (calendar 2024 estimate)
- Sandfire Resources Limited (ASX: SFR): Production: ~100,000–120,000 tonnes (combined estimate)
- Evolution Mining Limited (ASX: EVN): Production: ~67,400 tonnes
- Metals Acquisition Limited (ASX: MAC): Production: ~40,500 tonnes
- Aeris Resources Limited (ASX: AIS): Production: ~21,500 tonnes (estimate)
- 29Metals Limited (ASX: 29M): Production: ~20,000 tonnes (estimate)
- Aurelia Metals Limited (ASX: AMI): Production: ~12,500 tonnes (estimate for FY24)
- AIC Mines Limited (ASX: A1M): Production: ~12,500 tonnes
- Austral Resources Limited (ASX: AR1): Production: ~10,000 tonnes (estimate)
The above figures are sourced from Grok AI, and should not be relied upon; they are indicative only. Exact FY23/24 production figures for some companies (e.g. Austral Resources, Aurelia Metals) are not fully detailed in the provided sources, so estimates are based on guidance or prior-year data. Companies like Glencore, while operating in Australia, are not ASX-listed, so is excluded.
Global vs. Australian Production: BHP and Rio Tinto report global production, including non-Australian mines (e.g. Escondida). Their ranking reflects total output, as Australian-specific figures are not always isolated. Pure-play vs. diversified: Sandfire and Metals Acquisition are closer to pure-play copper producers, while BHP, Rio Tinto, and Evolution have diversified portfolios (e.g. iron ore, gold, silver, nickel, zinc).
