Markets react after Trump announces 50% copper tariff

By Amy Lv and Lewis Jackson

BEIJING (Reuters) -U.S. President Donald Trump said on Tuesday he would announce a 50% tariff on copper imports, sending U.S. Comex copper futures up more than 12% to a record high.

Prices on the Shanghai Futures Exchange (SHFE) and London Metal Exchange (LME) fell in the aftermath as the announcement signalled an end to a months-long arbitrage trade that had drawn the metal from global markets.

Below is reaction from analysts and smelters in Asia.

ANALYSTS AT GOLDMAN SACHS

"As with previous tariffs, this higher initial tariff rate could be used as a negotiating anchor, followed by concessions or exemptions.

"Given the increased risk of a 50% tariff, we expect a further acceleration in shipments into the U.S. in the coming weeks, as the incentive to front-run the tariff implementation has increased.

"We maintain our Dec-25 LME copper price forecast at $9,700 but now see a reduced risk that the price rises above $10,000 in 3Q."

ANALYSTS AT CITI

"Our base case is now for a 50% headline Section 232 copper import levy and we adjust our expectations for the COMEX-LME arb to price at 25-35% of LME or ~$2,300-$3,300/t versus 15-20% expected previously.

"Drawdowns of the accumulated excess of U.S.-based copper have the potential to completely displace U.S. refined copper import requirements for the remainder of 2025."

ZHAO YONGCHENG, ANALYST, BENCHMARK MINERAL INTELLIGENCE

"Copper prices on the SHFE are currently under pressure, but they will likely rebound after U.S. copper tariffs are finalised as fundamentals remained tight in the short-term.

"The widening price differential between COMEX and LME will encourage arbitrage trading, thus prevent price from falling more sharply. But overall, downside risk will be higher in the near term."

MATT HUANG, ANALYST, BANDS FINANCIAL

"In the short run, the spot market should get a lift: deliverable metal from South America will be in demand, pushing premiums higher.

"Chinese holders with physical copper can still rush shipments to the U.S., but arrivals that follow will likely sit on the sidelines, letting premiums slip back. Further out, once the tariff takes effect, the U.S. 'vacuum' fades, demand thins out, and the outlook turns bearish for LME and SHFE".

MARCUS GARVEY, HEAD OF COMMODITIES STRATEGY, MACQUARIE

"The loss of a physically arbitrageable price difference between CME and LME copper should result in U.S. copper import demand falling back from currently running ~200kt/mth towards something closer to 30kt/mth and stay low for a number of months as excess inventories in the U.S. are worked down.

"We would not expect the full tariff to be priced in because the excess inventories in the U.S. mean marginal spot flows would not need to be incentivised by the CME-LME price spread."

MICHAEL WU, ANALYST, SHANGHAI METALS MARKET

"There is almost nobody in Asia buying copper for delivery to the U.S. right now given how little time there is before the deadline ... shipments from Latin America are likely the only ones able to make the deadline."

A MANAGER AT A CHINESE SMELTER

"After U.S. copper tariffs land, copper will flow to China and other countries; prices will return to reflect normal fundamentals."

(Reporting by Amy Lv, Lewis Jacoson in Beijing, Tony Munroe in Singapore and Melanie Burton in Melbourne; Editing by Michael Perry)