Global copper traders are moving their shipments to China because they need to avoid the upcoming 50% copper import tariff imposed by President Trump which will start on August 1.
The Chinese market has experienced a rapid increase in metal offers because traders hurry to sell their U.S.-bound inventory. A Shanghai-based trader reported that inbound quotes reached their highest levels in several months because sellers want to clear their unsold inventory. A South American supplier made an offer to deliver 1,500 metric tons of copper during the last week of July.
The lack of information about which copper products will face taxation and no indication of exceptions means that only shipments currently in transit to the U.S. can clear customs before the deadline. Traders say even that may be tight.
The rerouting of cargoes has resulted in a 5% decline of the Yangshan copper premium to $62 per ton which indicates an oversupply in the market. The redirection of Latin American supply from the U.S. market will lead to increased copper availability in European and Asian regions according to analysts.
The reduction of U.S. copper imports creates opportunities for other markets to increase their capacity according to Benchmark Mineral Intelligence expert Albert Mackenzie.
The tariff policy of President Trump to boost domestic metal production has altered worldwide copper distribution patterns while forcing trade-dependent producers to locate new customers quickly.
