"August 1, 50% tariff," HSBC: Turning point for Shanghai copper and London copper
The United States plans to impose a 50% tariff on imported copper, which could become a significant turning point for the global copper market. HSBC's report indicates that before the tariff takes effect, sellers are shipping copper to the U.S., and buyers are actively purchasing, leading to a temporary increase in copper prices in Shanghai and London. However, once the tariff policy is clarified, the arbitrage window will close, and excess copper will flow back into the global market, putting downward pressure on copper prices. U.S. copper inventories have surged, and the market has strong expectations for the implementation of the tariff. It is anticipated that after the tariff takes effect, inventories will gradually return to normal levels, and short-term demand will be suppressed
The United States plans to impose a 50% tariff on imported copper, a policy that may take effect within this month and could become a significant turning point for the global copper market.
According to CCTV News, on July 9 local time, U.S. President Trump announced on social media that after receiving a strict national security assessment report, he declared a 50% tariff on copper, effective from August 1, 2025.
According to Wind Trading Platform, HSBC's latest research report points out that as the 50% tariff policy is about to take effect, sellers will ship copper to the U.S. to achieve high premiums, while buyers are actively purchasing before the tariff takes effect, resulting in a significant diversion of copper from the international market to the U.S. Although this behavior has temporarily pushed up the prices of Shanghai copper and London copper, its foundation is not solid.
HSBC warns that once the tariff policy is clarified, the current arbitrage window will close and reverse, and the surplus copper will flow back to the global market, thereby putting downward pressure on copper prices. At the same time, the accumulation of U.S. copper inventories may begin to decline, and short-term demand will also be negatively affected.
Tariff Shockwave: U.S. Market Frenzy, Global Copper Prices Rise
The report shows that the 50% tariff announced by Trump has directly pushed up New York copper prices, with the current premium of New York copper over London copper reaching 25%, indicating strong market expectations for the implementation of the tariff.
The report indicates that in the first half of the year, London copper inventories fell from 271,000 tons to 90,000 tons, while Shanghai copper inventories dropped from 377,000 tons in March to 126,000 tons in June. With the U.S. imposing tariffs on imported copper, this trend will reverse.
Currently, New York copper inventories have surged from 93,000 tons to 211,000 tons, reaching the highest level since 2018, reflecting a significant accumulation behavior in the market before the tariff takes effect.
HSBC predicts that once the tariff is officially implemented, U.S. copper prices will trade at import parity, with premiums likely locked in at around 50%. This will reverse the current arbitrage opportunities, and the trend of large copper resources flowing to the U.S. to lock in premiums will be reversed, leading to a loosening of the global (excluding the U.S.) supply-demand fundamentals.
HSBC expects that as the tariff takes effect, inventories will gradually return to normal levels, and this process will suppress short-term demand.
Seasonal Demand Decline, Potential Impact on China's Copper Market
The report further points out that although Shanghai copper and London copper prices have risen by 8% and 11% respectively since early 2025, signs of seasonal weakness in demand in the Chinese market have begun to emerge.
Data shows that China's apparent consumption of refined copper was strong in the first five months of 2025, but with seasonal factors at play, downstream demand may slow down In addition, the shortage of copper concentrate continues, and the treatment charge/refining charge (TC/RC) remains in negative territory, further exacerbating the cost pressure on Chinese copper producers.
HSBC warns that seasonal demand decline may offset some growth momentum, combined with the global supply-demand adjustment triggered by tariffs, leading to uncertainty for Chinese copper prices and the profitability of related companies in the short term.
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