Copper price surges in US as Trump launches probe into metal imports

Copper futures surged after President Donald Trump ordered the US Commerce Department to examine possible imports tariffs on all forms of the metal.

The move was the latest in a string of steps aimed at imposing sector-specific levies to protect US producers and remake global supply chains. Copper markets have already seen major dislocations this year as traders bet on tariffs opening a gap between prices in the US and the rest of the world.

Copper futures traded on the Comex in New York rose as much as 4.9% before paring some of the gains. Shares of US-traded copper miners also climbed on the news, with Freeport-McMoRan Inc. jumping more than 5% on Wednesday in New York trading. The price differential between copper futures on New York’s Comex and the London Metal Exchange spiked to top $1,000 a ton before narrowing to around $700 during US hours.

The investigation will be carried out under Section 232 of the Trade Expansion Act, which gives the president broad authority to impose restrictions on national security grounds. In a social media post, Trump wrote that the “Great American Copper Industry has been decimated by global actors attacking out domestic production.”

The US president had already announced plans to impose 25% tariffs on all imports of steel and aluminum from March 12, widening Section 232 action he took in his first term. With copper, Commerce has up to 270 days to investigate imports and report back to Trump.

More copper will be delivered into the US in the near term, according to Morgan Stanley analysts including Amy Gower. Given the uncertainty around timing and the size of a potential copper tariff, as well as other catalysts including China’s budget meeting and the expiry of the 30-day delay to Canada and Mexico next week, the price spread between Comex and the LME copper will likely stay volatile, the analysts said in a note on Feb. 26.

“If the US were to follow tariff levels on aluminium and steel and set a 25% tariff on copper, we would expect the spread to widen further from here,” they said.

Comex copper traded up 1.9% at $4.612 a pound as of 11:34 a.m. New York time, while prices on the LME rose 0.5%.

Some of the world’s top copper mines have begun restarting processing plants amid Chile’s worst power cuts in decades, adding another layer of risk to mining in the South American nation.

All of Codelco’s mines were gradually resuming operations Wednesday after power was restored, said an official at the state-owned company. Facilities operated by Anglo American Plc and Antofagasta Plc were also getting back on track.

(By Yvonne Yue Li)