Trump tariff threat sends US copper price soaring – how will it impact miners?

• Donald Trump’s announcement of 50% tariff on US copper imports sends Comex futures past US$5.50/lb
• ASX stocks were largely down on the news
• The massive dislocation of copper stocks creates opportunities to back US domestic miners and find opportunity in ‘sold off’ overseas plays, fundies say

Well he’s only done gone and done it.

After months under a Department of Commerce s232 investigation, copper imports to the USA could be facing tariffs as high as 50% after US President Donald Trump declared it so at a cabinet meeting on Tuesday night Aussie time.

The 200% tariff on pharma imports will loom as more dangerous for Aussie producers, who it appears will be given a one-year window to shift manufacturing lines to the States.

Our copper exports are relatively small in the global sense, and largely service the Chinese and Asian markets.

But the new placed the red metal on the lips of every investor and financial commentator after a run to over US$5.50/lb for US-based Comex futures.

At the same time LME three month prices, historically the global benchmark for refined metal, fell marginally to US$9790.50/oz – around US$4.45/lb.

COMEX #copper futures jumps to a 40% YTD gain after Trump called for a 50% tariff on imports. The premium paid for front month copper futures in New York now stands 25% above 3-month London benchmark, and with imports in the first six months equalling almost a full year of… pic.twitter.com/yOa31AMatF

— Ole S Hansen (@Ole_S_Hansen) July 8, 2025

Morgan Stanley estimated the tariff impost could cost importers US$5000 on each tonne of copper they try to bring to the United States, something which goes a long way to explaining the arbitrage as marketers load up ahead of any tariff shock. US traders have lifted stocks in the country 130% this year to 221,000t, while LME-stored copper stocks have sagged to less than 100,000t for the first time since 2023.

The charge in the US copper price, which rose as much as 13% to US$5.65/lb at its apex on Tuesday, saw Freeport McMoran, the biggest domestic producer, run 5% initially, before ending the Nasdaq trading day around 2.5% higher.

On the flipside, Rio Tinto (ASX:RIO), which owns one of two active primary copper smelters in the country at Kennecott in Utah as well as two-thirds of Oyu Tolgoi in Mongolia, a minority stake in BHP’s (ASX:BHP) Escondida mine in Chile and the majority stake in the undeveloped Resolution deposit in Arizona alongside BHP. BHP separately announced a discovery in 2023 in Arizona called Ocelot.

Sandfire Resources (ASX:SFR) fell 3.5% on Wednesday. It produces around 160,000tpa copper equivalent from the MATSA and Motheo projects in Spain and Botswana, but also owns the undeveloped Black Butte project in the US state of Montana.

South32 (ASX:S32) dropped 0.66%. Its primary copper exposure is its stake in the Sierra Gorda mine in Chile, but it also has a 50% share of explorer Ambler Metals, the owner of a large copper deposit in the Fairbanks region of Alaska, and Peake, an early stage copper prospect which is part of its Hermosa package in Arizona.

Understanding the US copper market

The US Geological Survey’s latest stats sheet shows just how significant the challenge for the US is if it really wants to reshore domestic copper production.

Mines in the US produced 1.1Mt of copper metal in 2024, but just 850,000t of copper metal came from its primary refineries, 40,000t from secondary refineries and 150,000t from post-consumer scrap.

With the US exporting 320,000t of metal in the form of copper concentrates and 60,000t of its refined metal, it was reliant on the import of 810,000t of refined copper to satisfy 1.6Mt of reported and 1.8Mt of apparent consumption.

Despite the prominence of complaints about China’s expansion of smelting capacity and dominance of supply chains in the Feb 25 direction that kicked off the DoC’s s232 investigation into the imposition of copper tariffs, it’s actually Chile – the world’s top copper miner – that supplies 65% of America’s refined copper.

Canada delivers 17% and Mexico 9%, with Peru shipping 6% and 3% sourced from other nations.

This poses serious questions about how tariffs will impact the flow of copper for US consumers and manufacturers, with Chile and its State owned copper miner Codelco apparently in the dark.

“The copper industry has been bracing for these levies since February, which has already seen increased flows into the US. Inventories in Comex warehouses have risen more than 130% to reach more than 221kt since the start of the year,” ANZ Research analysts said.

“Trump is expected to move forward with the levies once the Commerce Department’s formal review is concluded, although the timing remains uncertain. It’s also uncertain whether there will be any country exemptions. Chile, the world’s biggest producer of the metal, contributes around 70% of the 700kt of copper the US imports annually.

“Chilean officials remained in the dark about the Commerce Department investigation or any formal tariffs on its copper exports to the US.”

The fallout

What could the tariffs mean then for Australian listed copper stocks and the broader copper market?

Lowell Resources Fund (ASX:LRT) CIO John Forwood told Stockhead the arbitrage between US and LME copper delivered a huge short term advantage to US-based miners.

“The LME copper price is US$4.50 a pound, and the Comex copper price is US$5.50 a pound as of last night, so there’s a massive difference and benefit of producing copper in the US,” he said.

“Having said that obviously there’s a significant stockpile that’s been built up moving copper into the U.S. To try and get ahead of this potential tariff.

“It’s obviously not certain. Trump will change his mind multiple times between now and the first of August no doubt, but it’s probably looking more likely.”

It’s an ‘uneven playing field’, that has benefitted long term Arizona-focused developer New World Resources (ASX:NWC).

Its high-grade Antler mine, which could be returned to production for the first time since the 1970s by 2027, is at the centre of a bidding war between two international players.

Both London-listed Central Asia Metals and US private equity firm Kinterra Capital have floated 6.2c per share offers in different forms, well above the company’s 2.7c share price before CAML’s initial 5c per share takeover offer.

Some brokers continue to hold price targets even higher – Argonaut’s George Ross for instance has maintained a 6.5c PT – with arbitrage insto Harvest Lane, which brands itself as Australia’s only pure play M&A focused fund manager, upping its stake to over 9% with a series of on-market purchases completed at a price as high as 6.4c per share.

Neither bidder has declared their offer “best and final”, Forwood noted.

“New World, that’s one we’ve been in for quite some time. They’re potentially inside 12 months to commencing development at a really high grade copper equivalent opportunity with very good exploration potential,” he said.

“I think there’s still some significant upside there. It’s got a huge amount to like and has benefitted from the fast track of mine permitting in the US under this current administration.”

Copper prices remain well above historic levels, even using the LME benchmark, and Forwood continues to like explorers in Australia with large, low grade, low strip ratio deposits in Australia like Alma Metals (ASX:ALM) and Caravel Minerals (ASX:CVV).

While US assets look more attractive in the immediate aftermath of the Trump tariff announcement, some fundies are stocking up on non-US plays after they were sold off in the aftermath of the news.

“(The tariff announcement) creates uncertainty, which creates opportunity,” Precision Funds Management’s Dermot Woods told Stockhead.

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