What is the Impact of the US December Copper Import Surge?

The US is facing a surplus of copper, caused by an ongoing period of trade instability.

Following the threat of copper tariffs, aggressive stockpiling has resulted in mountains of copper across warehouses.

Despite this, the market remains volatile as the US continues to leverage tariff costs.

Copper tariff threats

In July 2025, US President Donald Trump announced a 50% tariff on copper imports. This led to large premiums of refined copper being sold on the Chicago Mercantile Exchange (CME). By the end of the month, it was announced that refined copper was exempt from the tariff. This shift left the copper market reeling amid a year of policy shifts and trade turbulence. 

The turbulence collapsed the arbitrage between the CME-trades US price and the London Metal Exchange (LME) international price. Despite this, US inventories were driven even higher in December, facing inbound flows of almost 200,000 tonnes. According to the World Bureau of Metal Statistics, throughout 2025, the US brought in 1.4 million tonnes of refined copper – a year-on-year increase of 730,000 tonnes. 

Present Trump is still threatening to impose tariffs on US copper imports, with the aim to encourage producers to make them in the US. This uncertainty has meant that traders spent 2025 making significant steps to move copper into the US before the additional costs would make an impact. Though the refined copper tariffs did not come into place, the threat alone was enough to cause ripples throughout the market.

Currently, the US imports 38% of its copper needs, as the country does not have the infrastructure to meet domestic production demand. US copper smelters have been closing and would require new infrastructure and power contracts to open up production again, as well as significant investment. The US only has two active primary copper smelters: Kennecott under Rio Tinto and Freeport-McMoRan's Miami smelter. As a result, US manufacturers will have to pass on the higher costs of imports to consumers until investment can increase domestic production.

Market uncertainty

A significant portion of the recently imported copper is sitting in exchange warehouses, creating a stockpile for the US. In 2025, CME stocks rose by 452,000 tonnes, closely matching total deliveries to exchange warehouses. 

Since the start of 2026, exchange inventory has grown by another 93,000 tonnes. The flow of metal has not stopped, but is instead being redirected to LME warehouses in New Orleans and Baltimore. At the beginning of January, stocks at both locations were at zero, but they have now grown to 10,825 tonnes and 36,450 tonnes respectively. An off-warrant LME storage is holding a further 30,2000 tonnes of copper.

As the threat on copper tariffs is still in the air, market uncertainty is still lingering, with CME prices still trading at a premium to the LME. Currently, the copper market is anticipating a decision around refined copper to be made in mid-2026, with a potential of phased tariffs beginning in 2027. 

An unsustainable method

Countries around the world have been looking to diversify their sourcing amid geopolitical volatility and ongoing trade tensions. This is resulting in countries investing in their own mining capabilities or forming contracts with rising producers. 

However, the US has been able to reduce its import dependency by developing this strategic stockpile. As this has occurred before the tariffs came into place, it may mean that there is no extra cost to the US consumer – as would happen if the US was required to invest into its own manufacturing. 

Despite this, the stockpile is not a sustainable answer to its demand. At present, only 5% of global mined copper production takes place in the USA. 

Though President Trump is aiming to solidify a domestic copper supply chain for the US, the continued export flow of scrap copper is rising. In 2025, exports of secondary copper rose to more than one million tonnes, a year-on-year rise of almost 10%. The Trump administration is aiming to retain at least 25% of 'high-quality' scrap copper for domestic use, meaning that this growth could put the US domestic copper supply chain at risk. 

The tariffs risk has been an ongoing threat for industries around the world, so the copper market needs to build resilience in any way that it can.