Trump's 'Tariff Bomb' Announcement Causes Surge in US Copper and Aluminum Prices

US-Europe Metal Price Gap Widest Since 2020

Canadian Aluminum Industry Faces 'Direct Hit' Concerns

Following President Donald Trump's announcement of a 25% tariff on steel and aluminum imports, a fierce battle for raw materials is underway in the United States. The prices of aluminum and copper have surged, creating a price gap between the US and European markets.

According to the Financial Times (FT) on the 11th, copper futures prices rose by 2% on the 10th (local time) at the New York Mercantile Exchange (COMEX), surpassing $10,000 per ton. The price in New York became more than $800 (approximately 1.16 million KRW) higher per ton than in London, marking the widest gap between New York and London prices since early 2020.

This price surge reflects concerns about a supply shortage in the US. On the 9th (local time), Trump stated, "We will impose a 25% tariff on all steel and aluminum imports," hinting at the possibility of additional tariffs on imported copper.

Metal market experts analyze that concerns about supply shortages are driving the price surge. Tom Price, an analyst at Panmure Liberum, explained, "The abnormally high prices in the US raw materials market reflect distorted market conditions," adding, "Especially for aluminum, it's difficult to secure alternative sources in the short term, leading buyers to compete to secure remaining supplies."

The US aluminum market has also entered a 'securing battle.' According to the Chicago Mercantile Exchange (CME), the Midwest premium for March aluminum futures surged by about 10% to 30 cents per pound compared to the previous trading day. The Midwest premium indicates that aluminum prices in the US Midwest are higher than in other regions like London. Since the US relies on imports for about 80% of its aluminum, the price increase due to tariffs is being immediately reflected.

JP Morgan stated, "US aluminum inventories can temporarily cushion the supply shortage," but also predicted, "If tariffs are imposed on all countries, the depletion rate of inventories will accelerate, and the Midwest premium is likely to exceed 40 cents per pound."

In the market, some traders are observed to be holding off on transactions until Trump's tariff policy is clarified. Analyst Al Munro said, "The greater the uncertainty, the more the market shrinks," noting that "there is a tendency for trading activity to decrease as investors take a wait-and-see approach."

Meanwhile, the Canadian aluminum industry is expected to be the hardest hit by the tariffs. The US sources 44% of its total aluminum imports from Canada.

Reporter Lee Hye-in hey@hankyung.com