Copper Futures Plunge 4% to Record Low

New Delhi, Jul 31 (PTI) Copper futures on the MCX slumped 4 per cent to touch a record low of Rs 861.70 per kilogram on Thursday after the US administration announced a steep 50 per cent tariff on imports of semi-finished copper and copper-based products, effective August 1.

On the Multi-Commodity Exchange (MCX), the August contract of copper declined sharply by Rs 35.9 or 4 per cent to hit a record low of Rs 861.70 per kilogram.

Subsequently, the September contract also fell by Rs 35.95 to touch a historic low of Rs 866.45 per kilogram on the commodities bourse.

A White House executive order, dated July 30, said that copper is being imported into the US in quantities and under circumstances that threaten to impair national security.

"...all imports of semi-finished copper products and intensive copper derivative products...shall be subject to a 50 per cent tariff. This tariff shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 am Eastern Daylight Time on August 1, 2025, and shall continue in effect, unless such action is expressly reduced, modified, or terminated," it said.

Meanwhile, India exported copper products worth USD 360 million to the US in FY2025, including plates, tubes, and other semi-finished forms. These shipments will now be more expensive in the US.

India is a net importer of copper, with imports totalling USD 14.45 billion in 2024-25, far outweighing its exports. Its main suppliers include Chile, Indonesia, and Australia. Notably, India also imported USD 288 million of copper scrap from the US, which may now become less viable due to disrupted bilateral copper flows.

The impact of the US tariff was felt across the overseas markets, with copper futures on the Comex in the US plunging nearly 22 per cent to USD 4.38 a pound, marking the largest single-day decline on record.

On the London Metal Exchange (LME), copper for October delivery decreased by 1.02 per cent to USD 9,698.50 a tonne.


Analysts said the move by the US administration to impose tariffs on semi-finished copper products has introduced volatility in the market, with fears of disruption to trade flows and increased uncertainty in the industrial metals sector.

Riya Singh, Research Analyst, Commodities and Currency, Emkay Global Financial Services, said the impact on India from the new US tariff is expected to be limited as exports of semi-finished copper products to the US were worth around USD 360 million in FY25, forming a small fraction of the country's total copper trade.

Singh noted that India is a net importer of copper, sourcing mainly from countries like Chile and Indonesia, which are not directly affected by the US tariff. However, she pointed out that the global copper trade could face temporary disruptions.

"Internationally, the redirection of copper trade could temporarily ease global benchmark prices due to oversupply pressures elsewhere. In the medium term, supply chain realignments and a rise in geopolitical tensions may increase the risk premium on global copper prices," she said.

Heena Naik, Research Analyst, Currency at Angel One, said copper prices, which had been on an uptrend, reversed course dramatically in just two days.

Naik added that President Trump's earlier hints in February and July about possible tariffs had prompted a surge in shipments of copper products to the US, pushing premiums higher.

"This imposition of tariffs is likely to have a direct impact on neighbouring countries like Mexico and Canada and indirectly on China, which is the world's largest producer of copper products. It could also disrupt the global copper supply chain and price system," she said.

According to Yash Sawant, Commodity Fundamental Analyst at Choice Broking, the tariff decision has caused copper to accumulate in US warehouses while tightening inventories elsewhere.

"This growing supply imbalance is already driving domestic premiums lower. The surplus in the US could lead to re-exports or a reduced import appetite for related copper products, potentially disrupting traditional trade routes and putting downward pressure on global premiums," Sawant added.