Copper

Japan’s Mitsubishi Materials is considering scaling back copper concentrate processing at its Onahama Smelter & Refinery as falling treatment and processing charges (TC/RCs) weigh on earnings, it said on Monday.

Mitsubishi Materials said the worsening TC/RCs from miners were expected to further erode smelting margins.

“To maintain and improve profitability, we need to raise the ratio of recycled raw materials and accelerate the shift to feedstock less vulnerable to TC/RC fluctuations,” the company said in a statement.

It is now considering the possibility of a partial shutdown of production facilities and a reduction in copper concentrate processing at Onahama, after planned maintenance from October to November this year, Mitsubishi Materials said.

Source – Reuters

US President Donald Trump went ahead with 50% tariffs on copper imports but exempted refined metals, which are the mainstay of international trading. The move triggered a record plunge for US prices after a period of fat profits for traders who hurried metal to America before the levies kicked in. A large premium for New York futures over London evaporated.

“The blow-out in the CME-LME spread has been touted as one of the most profitable commodity trades in modern history,” Daniel Ghali of TD Securities Inc. wrote in a note. “In a single session, the White House’s proclamation on copper tariffs annihilated the spread and catalyzed CME copper’s largest intraday fall on record.”

Copper futures on Comex in New York fell by 22% as traders recalibrated the value of metal in the US versus the rest of the world.

Source – Bloomberg

President Donald Trump on Wednesday said the White House was “very busy” crafting its trade policy as the clock ticks down on his self-imposed August 1 deadline. At that point, America could fundamentally reshape the way it does business around the world.

Trump signed executive actions on Wednesday imposing a 50% tariff on Brazil, a 50% tariff on certain copper products and suspending a tax perk for all countries that allowed cheap packages to fly into the US duty-free.

Trump said the agreement, if completed, would include developing Pakistan’s oil reserves with a yet-to-be-named oil company.

Source – CNN

The U.S. is expected to implement a 50% tariff on copper imports at the end of the week, but what happens next is anyone’s guess as talk of an exemption for Chile, the biggest U.S. supplier of the metal, and a potential U.S. and European “metal alliance” heats up.

“There remains uncertainty over country-based exemptions and a general sense of tariff fatigue,” wrote Natalie Scott-Gray, senior metals demand analyst at StoneX, in a note Tuesday. The European Union, meanwhile, looks to get a break when it comes to U.S. tariffs on steel, aluminum and copper.

President Donald Trump’s announcement on July 8 of the coming tariff had led to a 13% spike in copper prices that day, to settle at $5.6855 a pound, a record-high finish at that time, based on data going back to 1968, according to Dow Jones Market Data.

Scott-Gray said that when it comes to a potential country-based tariff exemption, Chile is “singled out,” not just because of Marcel’s comments and ongoing negotiations this week, but because the U.S. is reliant on Chile’s imports and the fact that the U.S. holds a trade surplus with Chile, she said.

Source – Market Watch

U.S. President Donald Trump sprang a double surprise on the copper market when he announced import tariffs of 50% effective next month.

The August 1 start date signals the end of the race to ship physical metal to the United States to capture the tariff arbitrage.

A lucky few with cargoes already afloat may yet cross the finishing line in time, but the physical tariff trade is rapidly unwinding.

The LME benchmark spread is now in a comfortable contango of $66 per ton, compared with a backwardation of more than $300 per ton at the end of June.

Source – Reuters

Mining giant BHP Group flagged rising costs and delays at a giant potash project in Canada and said it may sell its Australian nickel operations, as it reported record annual iron ore and copper production.

The company said Friday it faces rising costs at the Jansen potash project in Canada’s Saskatchewan province, its only major development currently under construction.

The company said it is also reviewing Jansen’s second stage, which is roughly 11% complete. BHP may delay first production from that expansion by two years, to fiscal 2031, because it reckons there might be more potash supply coming into the market over the medium term than previously envisaged.

BHP said it expects to produce between 1.8 million and 2.0 million tons of copper in the year ahead.

Source – The Wall Street Journal