Copper prices have soared as the US threatens tariffs on the metal and
China boosts its economy
[March 27, 2025] By
DAMIAN J. TROISE
NEW YORK (AP) — Copper prices have hit record highs as an ongoing trade
war between the U.S. and its key trading partners threatens to squeeze
supplies of the vital metal.
Buyers in the U.S. have been stocking up on copper ahead of potential
tariffs. Future prices for the base metal's most traded contract rose to
$5.24 per pound on Wednesday. Prices are up about 30% so far this year,
following modest gains over the last several years.
President Donald Trump has threatened to impose a tariff of up to 25% on
all copper imports and has called for increasing U.S. production. China,
the world's largest importer of copper, is embarking on a stimulus
program that could further increase demand for the base metal.
“Tariff threats, tightening supply, and stimulus-fueled optimism for an
economic rebound in China have underpinned a rally in copper.” said Adam
Turnquist, chief technical strategist for LPL Financial.
Copper is critical to energy infrastructure around the world. It goes
into cords for electronic devices, transmission lines, batteries, and
LED lights. A global shift to cleaner energy technology, such as solar
power, had already been boosting demand, which is expected to keep
growing as the development of artificial intelligence technology puts
more of a strain on data centers and the energy grid.
“When you look at the uses of copper in today’s economy, those uses and
the intensity of use of copper in today’s economy are growing,” said
Kathleen L. Quirk, President and CEO of mining giant Freeport-McMoRan,
at a recent conference for the global metals industry.
[to top of second column] |
Power transmission towers line a street in Redondo Beach, Calif.,
Wednesday, Sept. 7, 2022. (AP Photo/Jae C. Hong, File)
The International Energy Agency expects demand for the base metal to
rise 20% to 31,128 kilotons by 2030 and by 41% to 36,379 kilotons by
2040. The U.S. mined about 1.1 million tons of copper in 2024. It
currently lags the top producers, including Chile, Peru and China.
Copper mining companies are gaining ground amid rising demand. Shares of
Freeport-McMoRan, which operates most of its open-pit copper mines in
the U.S., are up 9% this year. Southern Copper, which has operations in
Mexico and Peru, is up 8% for the year. The broader market has been
slipping, with the S&P 500 down 2.9%.
The rising price of copper has a potential downside for some businesses
and consumers.
The construction industry, including homebuilders, could face a tighter
financial squeeze because of copper's rising cost as demand fails to
keep pace with supplies. Stubborn inflation has already pushed home
construction costs higher. Total construction costs for a single-family
home rose just under 9.2% in 2024 from the previous year, according to
the National Association of Homebuilders. Higher copper prices, coupled
with higher prices for other key building materials such as lumber,
could worsen inflation for the sector.
Appliances, electronics and other products containing copper could
become more expensive, also fueling inflation and prompting consumers to
cut back on spending for certain items.
All contents © copyright 2025 Associated Press. All rights reserved |
