Five Things to Know About Record Copper Prices
The metal is used in manufacturing everything from automobiles to mobile phones
By David Uberti and Ryan Dezember
Key Points
- President Trump announced a 50% tariff on copper imports, causing U.S. copper futures to jump 13% to a record high Tuesday.
- The tariffs, justified by national security, aim to bolster the U.S. copper supply chain amid Chinese dominance.
U.S. copper prices vaulted to an all-time high after President Trump said Washington will slap imports of the metal with a 50% tax.
Front-month futures contracts jumped 13% Tuesday, the largest single-day price surge in records going back to 1968, according to Dow Jones Market Data.
Prices eased Wednesday, declining about 3.6% to close at $5.4435 a pound, still higher than the record set in March after an earlier threat by the president to tax imports.
Commerce Secretary Howard Lutnick said on CNBC Tuesday that the new tariffs will go into effect by Aug. 1 or sooner.
The import taxes will arrive after similar duties on aluminum and steel, threatening to add new costs to key inputs for the U.S. economy.
Here’s what to know:
What is copper used for?
Copper is used in manufacturing everything from automobiles to mobile phones to computer chips.
The metal conveys electricity via wires and drinking water through pipes.
Consumption surged in recent decades as China modernized, and has lately gotten a boost from the growth in renewable energy production and the boom in data-center construction.
Demand is forecast to rise significantly in the coming years.
Glencore, one of the world’s largest copper producers, estimates the global supply must grow by about one million metric tons a year through 2050 to meet rising demand.
That would require annually adding production equivalent to the world’s largest copper mine, Chile’s Escondida.
Even if such rich deposits are found, it can take decades for mines to move from discovery to production—nearly three, on average, in the U.S.
Nearly half of demand will be met with recycled copper by 2050, up from about a third today, estimates energy-data firm Wood Mackenzie.
The thinking behind trade restrictions
The Commerce Department in recent months has been probing potential threats to American copper supplies under Section 232 of the Trade Expansion Act of 1962, which allows tariffs to be applied on goods considered essential for national security.
Until Tuesday, though, Trump hadn’t specified how steep copper tariffs would be.
The U.S. has ample copper reserves, the White House said in February, but “our smelting and refining capacity lags significantly behind global competitors.”
The administration said it aims to ensure the U.S. maintains a resilient supply chain for the metal.
Former President Joe Biden similarly tried to boost mining production and metals-processing stateside.
Current U.S. production comes mainly from Arizona as well as Utah, New Mexico and Nevada.
There are also deposits in Michigan’s Upper Peninsula and untapped reserves in Minnesota.
Who produces copper?
The U.S., which is the world’s fifth-largest producer, last year imported nearly half of the copper it consumed, according to the U.S. Geological Survey, with most of those shipments arriving from Canada and Chile, which is the world’s largest producer.
Peru, the Democratic Republic of Congo, Indonesia, Russia, Kazakhstan, Australia and Mexico are among other significant producers.
On the global stage, Beijing has increasingly dominated the supply chain.
Between 2019 and 2024, China, the world’s fourth-largest producer, invested nearly half of the $55 billion committed to new copper mines globally, according to Wood Mackenzie.
The consulting firm estimates that the country also accounted for 75% of worldwide smelter growth since 2000.
How high has the price of copper gone?
While domestic manufacturers and traders have awaited copper tariffs, they have hoovered up seaborne shipments in an apparent attempt to stockpile the metal.
That surge in demand has made copper the world’s hottest commodity and pushed U.S. prices far higher than their global peers.
Though U.S. copper futures are down from Tuesday’s record of $5.645 a pound, they remain up about 37% this year.
In the global trading hub in London, meanwhile, copper changed hands at around $4.50 a pound on Wednesday.
What does it mean for U.S. markets?
Copper has long been seen as a weather vane for economic growth, with higher prices often signaling industrial expansion.
But analysts now fear that tariff-induced price hikes on metals and other imported goods could prop up U.S. inflation, which has remained stubbornly elevated above the Federal Reserve’s 2% target.
Higher costs could hit the profit margins of U.S. companies that need copper to build infrastructure or manufacture other products.
At the same time, jumping commodity prices are a boon to domestic mining firms such as Freeport-McMoRan, which operates open pit mines in Arizona and New Mexico.
Shares in the firm are up 19% this year.
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