Copper retreats on profit-taking amid tariff uncertainty

Copper futures dipped below $5.10 per pound on Friday, retreating further from the record highs reached earlier this week, as traders locked in profits while awaiting further updates on the potential US tariffs.

Copper retreats on profit-taking amid tariff uncertainty

The metal had surged to an all-time high earlier in the week, driven by reports that US President Donald Trump is planning to impose tariffs on copper imports within weeks, accelerating the original timeline. This unexpected development spooked the market, prompting traders to act quickly in securing copper supplies before the tariffs take effect. As a result, US copper imports saw a sharp increase, with recent shipments totaling 500,000 tons—well above the typical 70,000-ton monthly average—indicating that traders were scrambling to buy copper ahead of the tariff implementation. This surge in demand has put significant pressure on supply, tightening availability in key markets, particularly in Asia, where copper is a critical component in manufacturing and infrastructure. The global scramble for copper has created a ripple effect across the supply chain, pushing prices higher and causing disruptions in trade flows.

US companies diversify their sources of copper

In response to the looming tariffs, US companies are also looking to diversify their sources of copper. Many are turning to alternative suppliers, particularly in South America, to secure more cost-effective and stable copper supplies. This shift is likely to alter trade dynamics, with South American producers potentially benefiting from the increased demand from the US. As the situation continues to unfold, the copper market remains highly sensitive to news regarding tariff decisions and supply chain adjustments, with traders closely monitoring any developments that could further disrupt the balance of supply and demand.