US Copper Premiums and Re-Export Trends

Let’s talk about copper imports and some of the complexity right now in anticipating overall effects on users (both in terms of timing and magnitude of effects). Two charts below (one my own, one reproduced from Bloomberg, originally from https://lnkd.in/g__Rvwet). Thoughts: •The top chart shows metric tons of imported copper cathodes & sections of cathodes (HTS 7403.11.0000), which is by far the largest imported type of manufactured copper product (HTS 74), with 2024 imports totaling $8.47 billion dollars (out of $17.2 billion in imports for all of HTS 74, or about 49.4%). In 2024, the average month saw ~75,000 tons of imports. April and May 2025 (last two data points) saw imports of 201,434 and 218,133 tons, respectively (or 2.7x and 2.9x prior year average monthly imports). This frontloading means there is a large stockpile of copper already in the USA that won’t be hit with tariffs. •However, before spiking the inflation football and saying “well, then there will be no inflation”, you need to look at the second chart. This shows the percent premium for US copper futures (Comex) relative to the London Metal Exchange. Normally, that premium is quite low. However, it exploded in 2025, reaching over 20% since 7/8 (when the 50% copper tariffs were announced). For reference, LME copper trades around $10,000 a ton today. What this means is that US users of copper have been paying a 5-15% premium for copper relative to firms in other countries over the past few months, which has now increased to above 20% (and this is before tariffs take effect). •Why does that price premium matter? Simple: higher copper prices in the USA reduce the competitiveness of US exports that contain copper. Moreover, it’s important to remember that far more people are employed in industries that use copper versus the entire copper mining, smelting, refining, and product industrial complex. Simple example: electrical equipment and component manufacturers (NAICS 335) employ 400,000 workers (https://lnkd.in/gEXCTusE), with electrical products extensively using copper. In contrast, the USGS reports just 13,000 workers in the entire copper industrial complex in the USA (https://lnkd.in/gU-pftdr). Implication: Copper tariffs are another example where we are tariffing an upstream intermediate input used by far more workers than employed in the industry that makes the upstream intermediate input. Such trade policies are net job killers, and have even been termed self-harming trade policy (https://lnkd.in/gWgxQjtY). #economics #markets #shipsandshipping #supplychain #construction #supplychainmanagement #manufacturing 

𝗖𝗼𝗽𝗽𝗲𝗿 𝗧𝗿𝗮𝗱𝗲𝗿𝘀 𝗙𝗮𝗰𝗲 𝗮 𝗗𝗶𝗹𝗲𝗺𝗺𝗮: 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝗴𝗲 𝗣𝗿𝗼𝗳𝗶𝘁𝘀 𝗩𝘀. 𝗧𝗮𝗿𝗶𝗳𝗳 𝗥𝗶𝘀𝗸? In recent days, we’ve seen the 𝗖𝗠𝗘/𝗟𝗠𝗘 𝗰𝗼𝗽𝗽𝗲𝗿 𝗮𝗿𝗯𝗶𝘁𝗿𝗮𝗴𝗲 𝗯𝗮𝗹𝗹𝗼𝗼𝗻 𝘁𝗼 𝗿𝗲𝗰𝗼𝗿𝗱 𝗵𝗶𝗴𝗵𝘀 as the expected timeline for U.S. tariffs on copper imports has been significantly tightened - from 9 months to a matter of weeks. While no specific rate is guaranteed, the risk has become very real for traders with metal already en route to the U.S. or allocated for future shipments. At first, this arbitrage opportunity seemed like a gold mine. Traders who sold CME copper futures and bought LME copper futures at an 𝗮𝗿𝗯 𝗼𝗳 +$𝟭,𝟬𝟬𝟬/𝗺𝘁 𝗼𝗿 𝗲𝘃𝗲𝗻 +$𝟭,𝟱𝟬𝟬/𝗺𝘁 stood to make massive profits by delivering metal into a CME warehouse or directly to a U.S. consumer. Some estimates suggest 𝘂𝗽 𝘁𝗼 𝟱𝟬𝟬,𝟬𝟬𝟬 𝗠𝗧 𝗼𝗳 𝗰𝗼𝗽𝗽𝗲𝗿 is now headed to the U.S. to take advantage of this play. But 𝘄𝗵𝗮𝘁 𝗵𝗮𝗽𝗽𝗲𝗻𝘀 𝗶𝗳 𝗮 𝟮𝟱% 𝘁𝗮𝗿𝗶𝗳𝗳 𝗶𝘀 𝗶𝗺𝗽𝗹𝗲𝗺𝗲𝗻𝘁𝗲𝗱? That would add an import duty of ~$2,500/mt—far outweighing even the most aggressive arbitrage levels. Suddenly, a trade that was making +$1,000/mt could be 𝗹𝗼𝘀𝗶𝗻𝗴 -$𝟭,𝟬𝟬𝟬/𝗺𝘁 instead. 𝗪𝗵𝗮𝘁 𝗔𝗿𝗲 𝘁𝗵𝗲 𝗢𝗽𝘁𝗶𝗼𝗻𝘀 𝗳𝗼𝗿 𝗧𝗿𝗮𝗱𝗲𝗿𝘀? 1️⃣ 𝗥𝗲𝗱𝗶𝗿𝗲𝗰𝘁 𝗦𝗵𝗶𝗽𝗺𝗲𝗻𝘁𝘀: Even metal already on the water can be rerouted to other locations—though at a cost. 2️⃣ 𝗨𝗻𝘄𝗶𝗻𝗱 𝘁𝗵𝗲 𝗔𝗿𝗯𝗶𝘁𝗿𝗮𝗴𝗲: Traders could deliver copper against an LME-priced short instead. While this means closing out their arbitrage trades, it might be less costly than paying the tariff. 3️⃣ 𝗧𝗮𝗸𝗲 𝘁𝗵𝗲 𝗿𝗶𝘀𝗸 𝗼𝗻 𝘁𝗮𝗿𝗿𝗶𝗳𝘀: Continue sending copper to the US and hope that tariffs are either not implemented, there are exceptions or quotas (like the section 232 on Aluminum), or that the cost of any import tariff remains below the level of arb they booked at. 𝗪𝗵𝗮𝘁 𝗔𝗯𝗼𝘂𝘁 𝗖𝗼𝗽𝗽𝗲𝗿 𝗣𝗿𝗲𝗺𝗶𝘂𝗺𝘀? The 𝗨.𝗦. 𝗰𝗼𝗽𝗽𝗲𝗿 𝗽𝗿𝗲𝗺𝗶𝘂𝗺 has collapsed as traders rush to sell physical metal to capture the arbitrage profits—who cares about the premium when the arbitrage is paying $1,000/mt? Meanwhile, premiums in 𝗥𝗲𝘀𝘁 𝗼𝗳 𝗪𝗼𝗿𝗹𝗱 (𝗥𝗢𝗪) 𝗺𝗮𝗿𝗸𝗲𝘁𝘀 𝗵𝗮𝘃𝗲 𝘀𝘂𝗿𝗴𝗲𝗱 as traders scramble to source material. 🔹 If tariffs hit, expect a reversal: ✅ U.S. premiums will spike as domestic producers adjust prices to reflect higher import costs. ❌ ROW premiums will fall as excess copper floods the market. This is a high-stakes moment for copper traders. 𝗪𝗵𝗮𝘁’𝘀 𝘆𝗼𝘂𝗿 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆—𝗵𝗲𝗱𝗴𝗲 & 𝗿𝗲𝗱𝗶𝗿𝗲𝗰𝘁, 𝗼𝗿 𝗿𝗶𝗱𝗲 𝘁𝗵𝗲 𝗿𝗶𝘀𝗸?

The world’s top commodity traders are rushing to ship copper to the US from as far afield as Asia as Donald Trump’s threat of import tariffs on the metal creates a huge opportunity for profit. The gap between copper prices in the US and the rest of the world widened sharply after the president on Tuesday ordered the Commerce Department to examine potential levies on the metal. On Wednesday, prices on New York’s Comex surged as much as 4.9% to trade more than $1,000 a ton above the London Metal Exchange benchmark, which rose 1.2% to about $9,500 a ton. Glencore Plc and Trafigura Group have been prominent among trading houses who’ve been moving to ship copper to the US market in recent weeks, according to people familiar with the matter. The bulk of their cargoes are coming from South America, but they’ve also made inquiries about shipping out copper from Asian warehouses tracked by the London Metal Exchange, some of the people said. Spokespeople for Glencore and Trafigura declined to comment. The threat of tariffs has created a compelling opportunity for profit for traders, according to several people involved in the market: US copper prices have traded at a premium of as much as $1,300 a ton this month, compared to the cost of shipping copper to the US of $300 a ton or less. That’s compared to razor-thin trading margins usually made from buying, selling and shipping commodity-grade metal. Alfred Cang, Mark Burton https://lnkd.in/dnzdRNff

Breaking: Codelco offers Korean customers record high USD 330/t premiums for contracts in 2026. This level is 288% up from last years level of US 85/t - and follows the trend set by large premium increases in Europe. Premiums have pushed up across the globe as a broad CME/LME arbitrage, caused in part by tariff fears, has created fears that large amounts of cathode will head to the US in 2026 and cause tightness elsewhere. Multiple sources noted that the high premiums in Europe and now in Asia were needed to incentivise producers to send material to regions other than the US. Next week the copper market meets in Shanghai for Asia Copper Week, this high premium offer for Korea may well set the tone for higher premium offers for Chinese customers too. Full story available free here: https://lnkd.in/eXvMrvrJ Benchmark Mineral Intelligence Benchmark Copper Didi Bostock #copper