Comex Copper slumps as Chile seeks tariff exemption – ING

Copper prices on Comex slumped after Chile’s finance minister said the country will push for an exemption for a planned US tariff on the metal. Trade talks between the US and Chile started in Washington on Monday, ING’s commodity analysts Warren Patterson and Ewa Manthey note.

Tariff should be positive for Comex Copper

"The US imports about half of its Copper needs. Chile is the largest import source, at around 40%. In theory, Chile could fully meet the United States' demand for refined Copper. The Copper market is awaiting more details on planned Copper tariffs, which are set to begin on 1 August."

"Traders have been shipping record volumes of Copper to the US to front-run the the tariffs. This has caused a record price gap between US Copper prices and the benchmark LME prices. Copper in the US is up around 40% so far this year, but they don’t yet reflect a 50% tariff. The premium now stands at around 25%."

"The tariff should be positive for Comex Copper. Prices are likely to rise to reflect the 50% levy once the current inventory overhang is depleted."