The prospect of U.S. tariffs on copper is creating varied impacts on copper miners, potentially causing a domestic supply crunch while increasing the U.S. copper price premium over the London Metal Exchange. Following an executive order by President Donald Trump to review potential copper tariffs or quotas, U.S. COMEX copper futures surged. The market anticipated this move, especially given previous discussions about tariffs on steel and aluminum. Analysts suggest that while higher prices may encourage domestic production, permitting issues remain a bottleneck. The arbitrage spread between U.S. COMEX and London Metal Exchange prices widened significantly, reflecting tariff expectations. Companies with existing U.S. operations, like Freeport-McMoRan and Rio Tinto, stand to benefit. A 10% tariff could notably boost Freeport-McMoRan’s profits and cash flow. However, long-term impacts might include reduced metal demand due to higher consumer prices and interest rates. Producers in Chile may not benefit, with U.S. consumers bearing the brunt of higher prices. — news from CNBC
