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Informist, Wednesday, Jul. 9, 2025

By Ashutosh Pati

MUMBAI – Futures contracts of copper fell on the Multi Commodity Exchange of India and the London Metal Exchange Wednesday after US President Donald Trump announced plans to impose 50% tariffs on copper imports, sparking concerns about demand. Market participants, though expecting tariffs on the metal, were taken aback by the size of the levy. They were expecting the tariffs to be 25%.

On Tuesday, Trump said that his administration will impose a 50% tariff on copper imports. Commerce Secretary Howard Lutnick said the tariffs on the metal are likely to be in place by the end of July.

"The drop (in copper prices) followed US President Donald Trump's unexpected announcement of a 50% tariff on copper imports, far above market expectations, triggering chaos across metals markets. The news sent COMEX copper prices soaring as much as 17% on Tuesday to an all-time high, while LME prices fell, widening the spread between the two benchmarks to a record 25%, or over $2,500/tonne," Kotak Securities said in a report.

Trump had, in February, ordered the Commerce Department to investigate the threat copper imports pose to national security and suggest ways to mitigate it. The mitigation efforts include "potential tariffs, export controls, or incentives to increase domestic production", according to the order. Since February, traders and companies globally have been moving the red metal to the US to avoid tariffs, lowering inventories outside the country.

"Year-to-date US copper imports are already at 2024's levels, tightening markets elsewhere and supporting LME prices. However, this extra US buying should now fade and imports could even undershoot normal levels," Dow Jones quoted analysts at Morgan Stanley as saying in a note. "A 50% tariff would add around $5,000 a metric ton to COMEX copper prices, which would risk demand destruction," the analysts added.

Demand for copper in the US will be impacted due to the tariffs, and copper prices may go down globally," said Deveya Gaglani, senior research analyst-commodities at Axis Securities. Gaglani said the support level for copper on the MCX in the short term is at INR 865 per kg and resistance is at INR 910 per kg. On the LME, he sees the support level at $9,200 per tonne and resistance at $10,200 per tonne.

ALUMINIUM and LEAD contracts traded in the red on the MCX while ZINC contracts rose.

At 1717 IST, on the MCX, the July futures contract of:
-–Aluminium was at INR 248.40 a kg, down 0.12%
–-Copper was at INR 883.45 a kg, down 0.8%
–-Lead was at INR 180.6 a kg, down 0.1%
–-Zinc was at INR 256.75 a kg, up 0.2%

Trading levels for the day on the MCX:
--Aluminium contract seen at INR 245.10-INR 250.90
--Copper contract seen at INR 867.40-INR 898.30
--Lead contract seen at INR 179.40-INR 182.00
--Zinc contract seen at INR 252.40-INR 260.50

End

US$1 = INR 85.67

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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