Global traders are urgently diverting U.S.-bound copper cargoes to Chinese buyers following President Donald Trump’s announcement last Wednesday of 50% tariffs effective August 1. As the world’s largest copper consumer, China has seen a surge in overseas seller offers since late June. This trade shift comes amid record-high copper prices this year, which the new tariffs may further escalate.
An anonymous Chinese trader confirmed receiving a 1,500-metric-ton “eager-to-sell” offer from South America for late-July/early-August delivery. The rerouting reflects urgent efforts to redirect copper stranded at U.S. borders before tariff implementation. Albert Mackenzie, analyst at Benchmark Mineral Intelligence, noted, If Chilean copper diverted from the U.S. flows to Europe, additional supply could reach Asia and beyond.
The Yangshan Copper Premium (b/l) – a key benchmark for China’s import premiums over LME prices – fell 5% to $62/ton last Thursday. Major commodity traders are offering Chinese buyers thousands of tons originally scheduled for U.S. delivery in July-August. Shanghai Futures Exchange’s most-traded copper contract fell for a fifth consecutive session, down 0.4% to 78,600 yuan ($10,952.87)/ton, its lowest since June 23.
Red Cloud Securities strategist Ken Hoffman stated: Copper already has strong momentum this year from military expansion and electrification demand. Tariffs are adding fuel to the fire. He warned U.S. manufacturers like automakers and utilities would pay higher costs, they’ll bear these premiums when buying copper tubes or wires.
Canaccord Genuity’s Dalton Baretto, MD of Metals & Mining Equity Research, reported industry panic over the tariffs, noting uncertainty among traders and producers. He predicted sustained U.S. price premiums over LME benchmarks and global trade flow rebalancing, though U.S. miners like Freeport-McMoRan could benefit long-term. Canadian firms Taseko Mines and Hudbay Minerals are reportedly planning U.S. market entry.
