US Government to Impose 25% Tariff on Copper Sooner; Copper Prices Hit Record High

Major Exporters: Chile, Peru, Australia, Mexico, etc., Little Export from Korea

Copper Prices Expected to Rise to $12,000 per Ton

The Trump administration is reportedly set to impose a 25% tariff on copper imports, following steel and aluminum. This news has driven copper traded on the New York market to an all-time high.

On the 26th (local time), Bloomberg, citing sources, reported that the U.S. copper import tariff is expected to be implemented much earlier than the originally scheduled deadline, possibly within a few weeks. This news led copper on the New York COMEX market to surge 3.1% to a record high of $5.3740 per pound.

Xu Wanchu, an analyst at Cofco Futures, said, "The sharp rise in copper prices reflects the anticipation of a 25% tariff. If the tariff is decided at less than 25%, prices will fall quickly," he added.

Subsequently, the benchmark price on the London Metal Exchange (LME) fell 1.1% to $10,004 per ton, and the gap between the two contracts widened to over $1,700 per ton.

As of the end of last year, major copper exporters to the U.S. included Chile, Peru, Indonesia, Australia, Mexico, Canada, and Brazil. Korea's export volume to the U.S. was $570 million as of the end of last year, so the impact of this measure is not significant.

President Trump instructed the Department of Commerce in February to submit a report within 270 days on the impact of copper on national security and the economy and the imposition of tariffs. However, it is known that the conclusion was reached more quickly. Some sources pointed out that the report is a formality because President Trump has consistently mentioned imposing tariffs on copper.

The rapid decision to impose tariffs on copper is based on the judgment that copper holds significant importance for U.S. security.

Copper is one of the most traded metals and is used in various applications such as automobiles, power grids, military equipment, and construction. The White House stated in a press release last month, "Copper is the second most used material by the U.S. Department of Defense, but the U.S.'s smelting capacity does not rank in the top five globally." According to the U.S. Geological Survey, U.S. copper mining output last year was about 1.1 million tons, down about 20% over the past decade.

Analysts at Goldman Sachs and Citigroup predicted in client notes that the U.S. would impose a 25% tariff on copper within the year. Trafigura, the world's largest copper trading company, projected that copper prices would reach $12,000 per ton.

Guest reporter Kim Jung-ah kja@hankyung.com