Comex copper futures drop as much as 16%

Comex copper futures drop as much as 16%

July 02, 2025

Copper prices on the Comex futures market dropped sharply on Monday, with the most active copper futures contract (HGc3) falling by nearly 3% to $5.613 per pound, according to data from Mining.com [3]. This significant decline comes ahead of the implementation of a 50% U.S. tariff on copper imports, set to take effect on August 1.

The uncertainty surrounding the tariffs, including which forms of copper will be taxed and whether there will be any exemptions, has been a major factor driving the market volatility. Chile, the world's top supplier of copper, has indicated that it will seek an exemption for copper within broader trade talks in Washington this week [2].

The Comex copper futures contract has been trading at a premium over the London Metal Exchange (LME) benchmark, with the premium falling from 30% to 26% as traders await more clarity on the U.S. tariffs [2]. This premium reflects the market's anticipation of higher costs and potential supply disruptions due to the tariffs.

In anticipation of the tariff deadline, global traders have been shipping massive amounts of copper to the U.S., triggering a buying spree and driving up prices. However, the recent decline suggests that traders are now more cautious about the potential impact of the tariffs on copper prices.

Meanwhile, the U.S. smartphone market saw minimal growth in the second quarter of 2025, with sales rising by just 1% year-on-year. This slowdown is partly attributed to manufacturers front-loading inventories in anticipation of the new tariffs and shifting production away from China, where electronics face heavy duties [1].

The uncertainty surrounding the U.S. tariffs on copper and the broader trade negotiations has created a challenging environment for investors and traders. As the Federal Reserve is expected to keep rates unchanged at its policy meeting later this week, market participants will be closely watching for any clues on the future direction of U.S. trade policy.

References:
[1] https://www.mitrade.com/insights/news/live-news/article-3-992752-20250729
[2] https://www.hellenicshippingnews.com/us-trade-talks-weigh-on-copper-reduce-comex-premium/
[3] https://www.mining.com/copper-price-pulls-back-sharply-ahead-of-us-tariff-deadline/