US copper prices experienced a dramatic decline on July 30, 2025, following President Donald Trump’s announcement to exempt raw copper materials from a planned 50% tariff on imported copper goods. This decision, part of the administration’s trade agenda, swiftly altered market expectations, which had anticipated significant disruptions and increased costs for US manufacturers.
Prior to the announcement, copper prices had soared, with COMEX copper futures rising from $9,667 per tonne on April 1 to $12,355 by July 29. This surge represented the highest price levels seen since the recovery from the COVID-19 pandemic. The initial optimism was tied to fears of supply shortages and expectations that tariffs would drive up domestic prices. Conversely, prices on the London Metal Exchange (LME) remained relatively stable, leading to a substantial 28% premium for US copper.
Market Reactions and Inventory Shifts
Following the tariff exemption announcement, copper futures on COMEX plummeted by more than 20% in a single day, dropping from $12,282 to $9,548. This marked the largest daily decrease in US copper price history. The spread between COMEX and LME prices narrowed dramatically from $2,704 to $29, effectively erasing profitable arbitrage opportunities that had emerged in the preceding months.
The market’s immediate response led to a notable shift in inventory flows. COMEX stocks surged from 97,524 tons to 257,915 tons, while LME stocks fell from 213,275 to 138,200 tons. This trend indicates substantial copper movements from Europe and Asia towards US markets, driven by the lucrative pricing differentials prior to the announcement.
The reversal of fortunes for US copper miners was stark. Freeport-McMoRan, the largest copper miner in the United States, had projected an increase in annual cash flow by $1.7 billion if domestic prices remained elevated. However, the company has since experienced an 11% drop in share price, from $43.2 to $38.8 per share, as market conditions shifted.
Implications for Global Copper Markets
The implications of the tariff exemption extend beyond US borders. Chile, the world’s leading copper producer, may find relief as its exports to the US are largely unaffected by the new tariff regime. The exemption centers on electronic conductors and copper pipes, which accounted for approximately 28% of US copper-related imports in 2024, valued at $4.7 billion. Notably, 23% of the value of the targeted products was sourced from China, suggesting a subtle strategic focus within the tariff policy.
Despite the immediate benefits for foreign suppliers, the exemption has left US smelters facing challenges. With only two primary copper smelters in the country, operators had anticipated increased demand due to trade barriers. Instead, they now confront a deflated domestic market characterized by excess inventories.
As the market adjusts, analysts predict that the overheated US copper markets may soon transition to a discount against LME prices. With COMEX inventories currently outpacing those in the Shanghai Exchange—over 259,000 short tons compared to 72,573 tons in Shanghai—the dynamics of global copper trading are shifting.
Investors are also reassessing their positions. Hedge funds, which previously held a significant number of long positions in US copper, are likely to reduce exposure in light of the recent price volatility. The outcome of these changes may pave the way for a return to more balanced conditions in the copper market, reflecting the interconnected nature of global trade and pricing mechanisms.
Overall, President Trump’s tariff exemption has not only reshaped the landscape for US copper prices but also signaled a pivotal moment for copper markets worldwide, with repercussions that could last well into the future.
