The world’s largest economy is preparing for a possible tax on the metal. Chile accounted for 73% of cathode copper imports in 2024, with the state-owned company being the main exporter.
By Patricia Marchetti y Benjamín Pescio
Copper buyers in the United States are anticipating the potential tariffs that President Donald Trump would impose on imports of the “red metal.” So much so that the US is on the verge of being supplied with the commodity like never before, whose primary provider is Chile.
According to the international news agency Bloomberg, it is expected that between 100,000 and 150,000 metric tons of refined copper will arrive in the US in the coming weeks. If the forecasts materialize, and if the full volume arrives within the same month, the figure would surpass the historic record of 136,951 tons imported in January 2022.
This contingency has led raw material operators such as Trafigura Group, Glencore Plc, and Gunvor Group to redirect large volumes of the metal originally destined for Asia toward the US. The amount would be so large that additional storage spaces are reportedly being reserved in New Orleans and Baltimore to accommodate the shipments.
Wide-Ranging Implications
Chile exported US$5.7 billion worth of copper to the US in 2024.
“In practical terms, this increased demand from the US displaces other destinations and leads to higher copper prices in that country, which then get transmitted to the rest of the markets. Additionally, it should be expected that inventories in warehouses and elsewhere will shift from the rest of the world to the US,” comments Juan Cristóbal Ciudad, senior analyst for Markets and Industry at Plusmining.
“Possibly the movement will occur from warehouses located in Asia and Europe,” the expert adds, noting that companies without committed material might favor the US.
A window of opportunity has opened for sellers, as the price differential between the New York Comex commodities exchange and the London Metal Exchange surpassed US$1,200 per ton.
Álvaro Merino, CEO of Núcleo Minero, explains that the largest imports in the US are being anticipated, but he emphasizes that “while early purchases and diversion of the metal’s supply from other markets may occur, what is crucial is to monitor China’s behavior,” the main copper consumer that accounts for 60% of global demand.
“Chinese authorities have announced measures to stimulate growth up to 5% in 2025, which, by the way, will boost copper demand,” he states.
This, according to various analyses, reinforces the possibility of a deficit in the global copper market in 2025.
In light of the situation in the US, sources consulted by Bloomberg warned that monthly shipments to Chinese ports during April and May could decrease by up to one-third compared to the same period last year.
Notably, requests to move copper from the London Metal Exchange warehouses in Asia reached their highest level since August 2017.
According to Goldman Sachs, while the tariffs are awaited, US copper imports could increase between 50% and 100% in the coming months.
USA in Search of the Red Metal: In Chile?
Regardless of the tariffs, the US consumes twice as much copper as it produces, so it needs to go out and buy.
In fact, Goldman Sachs and Citigroup even anticipate that with import duties of 25% – which they believe will be applied by the end of the year – US copper buyers will have no option but to continue trading beyond their borders. If overpayment is to be avoided, the time is now.
With Canada (its second-largest copper supplier) and Mexico (the fifth) in the midst of a trade war following the tariffs applied by Trump, buyers have turned their attention to their largest supplier: Chile.
In fact, Máximo Pacheco, president of the board of the Chilean state copper company Codelco, confessed to Bloomberg that last month he met with US clients and that “everyone is asking for more copper.”
To name just a few, among its US-based buyers the state-owned company counts companies such as Southwire, AmRod, La Farga Copperwork, Atlantic Copper, and Nexans. It also has copper and byproduct trading offices in Delaware and New York.
To put it in perspective: according to Plusmining data, Chile represented 73% of cathode copper imports in 2024, with Codelco being the main exporter. Thus, of the 600,000 tons “made in Chile” sent to the US last year, 260,000 (43%) were produced by the state-owned company. (The difference between the total export and import figures shown in the charts – 605,000 tons and 502,000 tons – is explained by the transit time lag).
Furthermore, to meet the additional demand, other producing operations that export to the US could take advantage of the opportunity, such as Freeport-McMoRan (El Abra), BHP (Escondida and Spence), and Antofagasta Minerals (Antucoya).
The additional wave of copper already arriving from Chile will be felt primarily at the port of Tampa, Florida, which received 53% of Chilean copper exports in 2024, followed by New Orleans in Los Angeles (33%), Houston (8%), and New York (6%).
Tariffs could alter the dynamics of copper trade between Chile and China, warns Bloomberg. Although the Asian giant accounted for 53% of Chilean copper shipments in 2024 and the US for 11.35%, in recent months more Chilean copper than usual has been directed to the US at the expense of China, and higher duties would keep that elevated flow in place.
Metal Closes at US$5.1 per Pound in the US, Nearing Historic High
Amid the hoarding of inventories due to a possible copper import tariff, red metal futures rose 1.66% to US$5,100 per pound at the close of the US Comex market, remaining only marginally below the historic close of US$5,106 seen on May 21, 2024. They are also still a little away from reaching the intraday record of US$5.2, set last year.
So far in 2025, Comex copper has accumulated a gain of 26.66%. This mark represents an unusual premium of 12.6% over the price at the London Metal Exchange (LME), where copper futures closed the session at US$4.53 per pound. LME warehouses have seen a continuous depletion of inventories recently. “Clearly, the trigger for the chaos in the copper market in recent weeks has been the announcement of tariffs. That disrupted the market, requiring a repositioning of copper between the most important market, which is the LME, and that of the US,” said Jorge Cantallopts, CEO of Cesco, to DF.
Other factors that have driven the price upward include a prospect of increased overall commodity demand following stimulus announcements in China and the weakening of the dollar worldwide.
Source: Diario Financiero