A 0% tariff on primary copper reflects the continued trend of misdirection from President Trump…

The pre-tariff rush and subsequent bluff

In the months leading up to the proposed 50% copper tariff announcement by the USA, the market was primed for some level of import restriction, but few expected the scale or speed of the policy. The result? A turbulent arbitrage play.

Between March and May 2025, US imports of refined copper surged to 542kt , equal to 60% of total 2024 volumes, as traders raced to land physical orders before the tariff window closed. Copper from Chile, Peru, Australia, and Europe flooded into the US market. Traders exploited the spread between tariff-free and soon-to-be-tariffed flows, stripping inventories from the London Metal Exchange (LME) and Shanghai Futures Exchange (ShFE). Spreads have reached more than 30% between the Commodity Exchange (COMEX) and LME since the announcement on 9 July.

This rush has left the USA with an unprecedented stockpile. Visible COMEX inventory has more than doubled since March to around 222kt Cu. Off-market estimates suggest a further 400–500kt Cu is held in bonded warehouses or domestic storage, effectively “pre-paying” for copper into 2026. Citi and Macquarie both now estimate that the US copper market may be oversupplied for up to nine months.

The actual tariff scope, however, came as a surprise to the market. The proposed 50% import duty applies only to semi-finished copper products, such as copper wire rod and wire, tubes, and electrical components, excluding key copper inputs such as cathodes, anodes, concentrates, and scrap. This triggered a 17% drop in US copper prices on the COMEX, as traders rapidly unwound speculative positions built around the expectation of a broader policy.

The COMEX –LME spread, which had widened to more than 30%, collapsed as copper shipments originally routed to the USA were redirected. The unexpected policy pivot largely benefits exporters such as Chile and Peru, while doing little to support US mining and refining capacity, the very structural weaknesses the policy was expected to address.

US copper market: rising cost pressures and import dependency

US copper assets are typically positioned in the upper quartiles of the global extractive cost curve, with average production costs 22% above the global weighted average, which is estimated at US$2.83/lb Cu for 2025. This elevated cost profile reduces competitiveness in international markets and reinforces a long-standing reliance on imported refined copper to meet domestic demand.

Project Blue estimates that the USA will account for approximately 5% of global copper extraction in 2025, with potential refined copper output totalling 1,023kt. However, only 471kt Cu (54%) of this production is expected to be refined domestically due to infrastructure limitations. The remainder is either exported as concentrate or remains unprocessed. US extractive production is split between concentrate-based mining and SX–EW (solvent extraction–electrowinning) techniques. In contrast, domestic demand is projected to reach 1,664kt Cu, resulting in a 63% dependency on refined copper imports to meet consumption needs.

Although this deficit only represents insufficient mine output, the USA’s constrained smelting and refining capacity also limits its ability to convert domestically mined concentrate into refined copper. Currently, the USA is capable of converting just 550kt of refined copper from concentrate annually. This means the true primary market deficit is closer to 1,190kt Cu. Furthermore, this figure does not account for the additional processing demand from secondary (recycled) material, highlighting a critical structural bottleneck in achieving long-term supply security.

Looking ahead, the challenge is set to intensify. Project Blue forecasts that US import dependency will rise to 78% by 2030, with an estimated 848kt of refined copper imports required, assuming the full conversion of all domestically produced concentrate into refined material. Without new investment into both domestic extraction capacity and smelting/refining infrastructure, the USA is expected to remain exposed to international supply risks and price volatility, particularly in the face of protectionist policies, such as import tariffs. This is notwithstanding additional pressures such as falling ore grades and ageing infrastructure.

Tariffs without transformation: the limits of policy without investment

In the short term, the exclusion of copper cathodes, anodes, concentrates, and scrap from the recently announced US tariffs has eased immediate pressure on global primary supply chains. While the 50% tariff applies only to semi-finished copper products, such as copper wire rod and wire, tubes, and electrical components, it may offer short-term protection to US-based manufacturers of these goods by shielding them from lower-cost foreign competition. With raw material inputs flowing freely, domestic copper prices are unlikely to rise in the near term, especially given the current oversupply from pre-tariff stockpiling. Nevertheless, cost pressures on fabricated components may filter through to end users, particularly where imported alternatives are now subject to tariffs. Crucially, the policy does not incentivise new investment in extraction or refining capacity, which remains the core obstacle in building domestic resilience.

The longer-term impact depends on whether future administrations increase tariff coverage. Should the proposed phased tariffs on refined copper (15% in 2027 and 30% in 2028) be implemented, this could create the economic conditions necessary to support domestic capacity growth, particularly if paired with permitting reform or targeted investment incentives. In such a scenario, US assets could fall down the cost curve in real terms, domestically, improving competitiveness over time.

However, without corresponding investment, the reality of which is often slow, capital-intensive, and uncertain, particularly in the face of permitting delays and ageing infrastructure, higher tariffs risk further isolating the US market and inflating costs for domestic consumers. As the spread between demand and local supply widens, import dependency may deepen rather than diminish. Meanwhile, producer nations such as Chile, whose copper sector is largely state-controlled, may seek to negotiate preferential access or tariff exemptions to maintain their position as key US suppliers.

The effectiveness of a future increase in tariffs will ultimately depend on how quickly the USA can pivot from a dependency model to one of internal resilience—a transformation that, at present, remains aspirational. However, President Trump has also authorised the Secretary of Commerce to take steps under the Defense Production Act to support the domestic copper industry through the initial requirement of a minimum of 25% of copper input materials (scrap and other raw materials) to be sold domestically to provide more feedstock for domestic fabricators and secondary refiners. Project Blue will address these aspects in a separate follow-on article.

As highlighted in this review, our cost service provides a forecasted and historical analysis across the market, offering users a detailed breakdown of individual assets with the ability to compare and adapt the data to their needs.

Our analysis aims to showcase these features while providing insight into the current landscape of the copper market, how our data can be used to draw coherent and structured hypotheses about supply-side dynamics, and how costs may shape the market share of production looking forward.