Why copper went down

The price of copper has experienced a significant drop due to a combination of factors:

1. **Tariff Exemption Impact**: The most significant factor contributing to the price decline is the exemption of refined copper from the tariff package announced by the U.S. government. Initially, traders had anticipated a 50% tariff on refined copper, which had led to a surge in copper prices. However, the actual tariff only applies to semi-finished copper products, excluding refined copper and other critical copper materials such as ores, concentrates, and cathodes. This unexpected move led to a sharp drop in U.S. copper prices, with the Comex copper futures down 22%.
2. **Market Reaction and Speculation**: The market reacted swiftly to the news, with copper futures experiencing a substantial sell-off. The announcement of the tariff exemption eliminated the premium that U.S. copper had enjoyed over the global benchmark, leading to a significant arbitrage-driven selling pressure. The COMEX copper futures plunged nearly 20% on July 30, 2025, following the announcement.
3. **Global Copper Market Dynamics**: The global copper market is experiencing a mixed environment with the push for clean energy driving up demand, but copper supply is struggling to keep pace. The demand for copper in the U.S. could increase due to the expected manufacturing reshoring and the development of a complete domestic copper supply chain. However, this could lead to increased competition for copper-rich regions like South America and Africa, potentially altering global trade flows.
4. **Historical Copper Prices**: The price drop is also part of a broader trend of copper prices facing downward pressure. For instance, copper futures have been under pressure due to the global power grid expansion, which has led to a surge in demand for copper, but the supply side is struggling to keep up, raising concerns about a looming copper shortage.

In conclusion, the price of copper has fallen due to a combination of factors including tariff exemption, market reaction and speculation, global copper market dynamics and historical copper prices.