The futures and spot markets experienced a sharp decline, with the spot market maintaining a premium structure. Today, the atmosphere in the domestic commodity futures market was cold. All domestic metal futures declined. The main contract of copper futures (2509) on the Shanghai Futures Exchange plunged in the morning session, and the decline deepened during the trading. As of 10:45, the latest price was 78,290 yuan/ton, down 780 yuan/ton, or 0.99%. In the spot market, the buying and purchasing atmosphere declined in the early morning due to the falling prices. As the spot premium structure was relatively stable, the sellers still had confidence in maintaining the price. There were also actions of downstream entities to chase the falling prices and replenish stocks, which increased the trading enthusiasm in the market. Data from the Changjiang Nonferrous Metals Network showed that the spot price of 1# copper in the Yangtze River region was reported at 78,660 - 78,700 yuan/ton, with an average price of 78,680 yuan/ton. Compared with yesterday, it dropped by 730 yuan/ton, and the spot premium increased by 10 yuan, reaching 260 yuan/ton. On July 31st, it was reported that on July 30th (Wednesday) local time, US President Trump signed a new copper tariff policy that caused a huge wave in the global copper market. This 50% tariff policy targeting semi-finished products and copper-intensive finished products did not completely restrict raw material imports as expected, but still led to a 19.5% single-day drop in COMEX copper futures prices, setting a record for the largest decline this year. The policy details: "Precise strike" on semi-finished products, with the raw material channel retained According to the executive order issued by the White House on July 30th, starting from August 1st, the United States will impose a 50% tariff on copper tubes, copper wires, and other semi-finished products and copper-intensive finished products. However, it explicitly excludes copper ore, concentrates, and cathode copper, which are core products in the refining process. This "differentiated" design is regarded as the continuation of the United States' "protection and openness coexistence" strategy in key mineral sectors - by imposing high tariffs to restrict the import of downstream products to support local processing capabilities, while maintaining the raw material import channels to ensure the stability of the supply chain. Market reaction: "High-platform dive" of COMEX copper futures, premium vanished After the policy was announced, the premium formed by the COMEX copper futures relative to London copper due to the comprehensive tariff expectations was quickly wiped out. The maximum decline of COMEX copper futures during the trading session reached 19.5%, and it closed at 3.82 US cents/pound, down 18.7% compared with the previous trading day. Analysis pointed out that this sharp decline not only reflected the market's doubts about the domestic copper processing capabilities of the United States, but also highlighted the short-term chaos in global copper trade flows. Supply chain changes: Chile "relaxes" The US recycled copper industry is facing opportunities. The world's largest copper producer, Chile, welcomed the raw material exemption policy. The Chilean National Copper Company (Codelco) said it was a "positive signal for the relationship between the United States and major suppliers" - about 60% of Chile's cathode copper is exported to the United States. This policy was regarded as a benefit for its smelting industry. While the largest copper company in the United States, Freeport-McMoRan, responded cautiously, stating that it would "deeply assess the policy details before making a statement". It is worth noting that the executive order also required US recycled copper enterprises to shift 25% of high-quality scrap copper to the domestic market. This move may accelerate the construction of the US recycled copper recovery system.
However, industry insiders pointed out that in the short term, the United States still cannot make up for the raw material import gap, and its reliance on copper concentrate imports will still exceed 70% in 2024. Future policy expectations: 2026 may be a key node Trump emphasized that the current measures are "temporary measures" and has asked the Department of Commerce to submit a domestic copper market assessment report by June 2026. At that time, it will consider imposing tariffs on refined copper in stages (15% in 2027 and 30% in 2028). This statement reserved flexibility for the future policy direction. The market expects that as the 2026 assessment node approaches, global copper trade flows may undergo another round of adjustment. Analyst opinion: Copper market enters "policy sensitive period" The senior commodities research team of Goldman Sachs pointed out that the US copper tariff policy highlights its "processing for raw materials" strategic intention, but it may exacerbate the regional imbalance of copper products in the world in the short term. Although London copper has received support due to the exemption of raw materials, if the United States subsequently imposes additional taxes on refined copper, the London market may face new supply pressure. The analysis of the Changjiang Nonferrous Metals Network believes that the implementation of this policy marks the entry of the global copper industry chain competition into a new stage: "The United States attempts to reshape its domestic processing capabilities through the leverage of tariffs, but the reconstruction of the industry chain requires time. In the short term, copper-exporting countries such as China and Peru may accelerate their layout in transshipment markets in Southeast Asia, while raw material-supplying countries such as Chile and Australia will further consolidate their strategic positions."
