Copper holds steady as US tariff deadline nears

Copper futures hovered around $5.76 per pound on Monday, holding close to all-time highs as traders braced for the imminent implementation of a 50% U.S. tariff on copper imports, scheduled to take effect on August 1.

The looming policy shift has injected volatility into the market, driving a wave of speculative interest and strategic stockpiling by U.S. importers hoping to front-run the tariff deadline. As a result, shipping activity has surged in recent weeks, with vessels carrying refined copper and semi-finished products reportedly accelerating their arrival to U.S. ports in a bid to beat the cutoff date.

Despite the surge in prices, investors remain cautious, largely due to a lack of clarity from the Trump administration on the scope and structure of the tariffs. It remains uncertain which specific copper products—such as cathodes, wire rods, or alloyed copper components—will be subject to the full 50% levy.

This regulatory ambiguity has made it difficult for traders and manufacturers to hedge effectively or adjust procurement strategies, adding to near-term market anxiety.

Additionally, questions persist over how copper and related metals fit into the broader framework of the newly announced U.S.-EU trade deal, which imposes a 15% tariff on most European exports to the U.S. While metals were not explicitly mentioned in the initial announcement, speculation continues that certain industrial materials, including copper-based goods, could either be exempted or face altered tariff schedules as negotiations evolve.

This lack of transparency has further complicated supply chain planning for manufacturers across both regions.

The current price strength is also underpinned by ongoing concerns about global copper supply. Labor disruptions in Latin America, notably in Chile and Peru—the world's top copper-producing nations—alongside declining ore grades and project delays, have constrained production growth. At the same time, long-term demand prospects remain robust, fueled by accelerating investments in green energy, electric vehicles, and grid infrastructure, all of which are heavily copper-intensive.

However, analysts caution that the rally may not be sustainable in the short term. Once the pre-tariff shipping rush subsides, a sharp decline in U.S.-bound copper imports could materialize, potentially leading to oversupply in other regions and downward pressure on prices.

Moreover, a prolonged period of elevated prices may prompt end-users to seek alternative materials or delay non-essential projects, curbing demand.

In the broader context, copper remains a key barometer for the global economy, and its current rally reflects both real demand and geopolitical distortions. As markets await further clarity on trade policy and monitor macroeconomic signals, volatility is likely to remain elevated heading into August.