Copper Price Sudden Fall

Copper prices fell this week, which was one of the sharpest market declines in recent years. On Wednesday, COMEX copper fell more than 20% in a single hour. The trigger was a policy shift: the U.S. government announced that refined copper would be exempt from a planned 50% import tariff.

This decision came after weeks of anticipation around broader tariffs that were expected to make imported copper more expensive and tighten supply in the U.S. Futures prices had climbed in response. The reversal caught traders off guard, and that surprise is what set off the panic.

What Really Happened

The U.S. had planned 50% tariff on a wide range of copper imports, including refined copper, semi-finished products like pipes and wires, and concentrates. But just before the tariffs were set to begin, refined copper was taken off the list.

This was significant because refined copper is the foundation of many U.S. industries, from construction to electronics. Removing it from the tariff plan meant copper supply in the U.S. would not be disrupted, which immediately undercut the main reason prices had risen in the first place.

Why Copper Prices Crash Was So Severe

The market reaction was radical as traders were expecting tighter supply. Once it became clear that refined copper would continue to flow freely into the U.S., those positions collapsed.

COMEX prices fell sharply, because the pricing premium that had built up around U.S. supply fears vanished overnight. This created an imbalance and traders rushed to sell, some were forced out by margin calls, and prices tanked.

To make matters worse, analysts are now warning that copper sitting in U.S. warehouses might be shipped back out to global markets, since it no longer benefits from the anticipated domestic demand; it adds even more supply to a market that’s already showing signs of weakness.

Copper: Supply, Demand

Copper prices are not only reacting to U.S. policy, there is a global demand issue coming from China, the world’s largest copper consumer.

In July, China’s manufacturing sector declined again. Export orders fell for the fourth straight month, and factory job cuts accelerated. These are not good signs for copper, which is used heavily in construction and manufacturing.

On the supply side, the top copper producer, Chile reported a 6% drop in output in June. That might normally support prices, but right now, demand weakness is outweighing supply constraints.

What Happens Next

Copper is now trading around $4.43, trying to stabilize after the crash. Price movements over the next few weeks will likely stay inside a tight range unless something big changes.

In the short term, copper may recover some ground as the market digests the policy news. But with China’s economy under pressure and global inventories rising, there’s not much room for a strong rally.

The Tariff Decision

Exempting refined copper from the 50% tariff had clear benefits. It protected U.S. manufacturers from a sudden spike in material costs, avoided fueling inflation, and preserved trade ties with key suppliers - Chile, Canada, and Mexico.

But it also weakened the tariffs’ original purpose, which was to support domestic producers and reduce reliance on imported metals. Because refined copper still arrives duty-free, U.S. smelters and miners have little to gain from the policy change. Additionally, partial tariffs on only semi-finished products (such as wire and pipe) could disrupt supply chains that rely on both raw and recycled copper.

Bottom Line Is

The copper sell off was driven by traders trying to adjust to a sudden rule change. Now that the dust is settling, the market will have to face a bigger question:

• Can copper prices recover if China stays weak and stockpiles keep rising?

For now, copper looks like it’s searching for balance.