U.S. President Donald Trump signed an executive order in Washington, D.C. on February 25, 2025 in the Oval Office of the White House. Trump directed the Commerce Department to investigate potential tariffs on copper imports.
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When U.S. tariffs on metal looms, copper miners may see different results – increasing the potential for domestic supply tightening, while also increasing the premium on U.S. copper prices on London Metal Exchange.
Our COMEX copper futures U.S. President Donald Trump signs a Tuesday night and Wednesday jump Executive Order The review of potential copper tariffs or quotas is required on the grounds of national security issues. The review will also examine domestic demand, production levels and “the impact of foreign government subsidies, surplus and predatory trade practices on the competitiveness of the U.S. industry.”
Discussing him Coming soon for 25% tariffs on steel and aluminumPiotr Ortonowski, head of market analysis for benchmark mineral intelligence copper, told CNBC.
The market has been launching Tariffs to Canada and Mexicothe two largest sources of copper imports to the United States
But traders continue to participate in a speculation game, including the size of tariffs and whether countries like Chile can be exempted, which will minimize market impact, Ortonowski said.
“The grand idea behind the tariffs is to remove domestic copper supply, and there are many channels for mining projects in the United States, but the main problem there is allowed. So even higher prices may inspire projects, the main bottleneck will be allowed.”
“Even if the project is quickly tracked and allowed to be resolved overnight, it will be four to five years until we see a significant increase in domestic production.”
According to Benchmark, COSEX and LME data, arbitrage prices on the London Metal Exchange rose to $400 under the February 13 tariff expectations. News from Trump this week gave Spike a $700 backup.
Typically, over time, the gap will fall again, historically approaching zero, Ortonowski continues, but the introduction of tariffs will remain rising as American consumers bear the brunt of the price.
“If tariffs are applied, there is an additional risk of rising New York copper” – but if tariffs do not exceed expectations, the spread of arbitrage may retreat. ”
Advantages of US operators
Analysts say these market dynamics mean that companies that have existing U.S. production will benefit.
Matt Britzman, a senior equity analyst at Hargreaves Lansdown, told CNBC that the new tariffs will pressure the U.S. to rely on imported copper prices.
Freeport McMoran and Red River Britzman said he is one of the largest copper producers in the United States and is a potential beneficiary.
Alex Hacking, an equity research analyst at Citi, was also named Freeport-McMoran, which handles about 1.4 million pounds of copper each year in the U.S., making it the biggest winner in the bank’s coverage.
“We believe that 10% of copper prices will flow directly to the COMEX price,” the hacker said in a note issued Wednesday. Freeport’s estimates are attributable to about 9% profit growth, with free cash flow growth of about 37%.
More broadly, the winner will be US copper miners who can use domestic processing, which again points to the expected cosx premium over the LME premium in the tariff.
“In our opinion, export concentrates may be taxed on the way back. Downstream manufacturers may also benefit if they include downstream products such as steel and aluminum,” Hacking said.
Meanwhile, Hargreaves Lansdown warned in a research statement Wednesday that while copper prices are higher after announcing initial increases in mining stocks – as expectations will pile up as U.S. manufacturers try to build stocks before tariffs, it is only a short-term increase.
“If tariffs raise consumer prices and higher interest rates, it could have a ripple effect on growth and orders in a range of industries, which could lead to lower demand for metals and lower prices,” said Hargreaves Lansdown’s head of currency and markets.
“Producers in Chile will not benefit at all,” Benchmark’s Ortonowski told CNBC. “American consumers will be the first to raise copper prices.”
Regarding the impact of tariff reviews on stocks, Morgan Stanley analysts said on Wednesday that companies like this AntofagastaLondon-based Chilean miners will likely continue to export to the United States with a rise in tariff-increasing COMEX Premia, or “export cathodes to other regions based on freight differences.”
Morgan Stanley’s research found that every 10% change in revenue in the Kennico copper mining business in Rio de Janeiro near Salt Lake City affects 2025 earnings, taxes, taxes, depreciation and amortization (EBITDA) of about 1%. It has the same estimate of the income impact of Polish miners KGHM From Robinson and Carlotta Mining in the United States.
In Londin mining in Canada, it noted that while the company’s Eagle Mine is located in the U.S., it produces copper concentrates in the U.S., “nickel concentrates are exported to Canadian smelters and sold under long-term contracts, not in the U.S.”
– Michael Bloom of CNBC contributed to the story.
