Chinese Importers Halt US Copper Scrap Purchases Amid Tariff Concerns
Many Chinese metal importers have stopped purchasing US copper scrap in anticipation of potential tariffs as Donald Trump prepares to assume the presidency, according to Beijing Antaike Information Development Co. The halt in purchases began in mid-November, as these shipments would likely arrive around the time of Trump's inauguration on January 20, the state-owned researcher reported, citing its survey of traders.
The president-elect has threatened to impose tariffs of up to 60% on all Chinese imports, which could lead to retaliatory measures from Beijing. During Trump's first term, the world's two largest economies were embroiled in a trade war, which saw China imposing a 25% duty on US copper scrap. Tensions have recently escalated as Washington announced fresh restrictions on China's access to components for chips and AI technology.
Scrap metal accounts for about 30% of copper production in China, according to the China Nonferrous Metals Industry Association. Government data indicates that roughly a fifth of the country’s scrap copper imports during the first ten months of this year came from the United States. The potential loss of US imports comes at a time when China’s copper smelters are already facing a scrap metal shortage due to changes in local governments' tax rebate policies.
The suspension of US scrap copper imports is likely to tighten China’s supply, increasing the demand for refined copper and potentially causing volatility in prices and processing fees, Beijing Antaike noted.
On the London Metal Exchange (LME), copper declined by 0.1% to $8,982 per ton as of 12:02 p.m. in Shanghai. Copper has retreated by nearly 20% since its record high in May due to a stronger dollar and slowing demand in China. Other metals also saw declines, with aluminium dropping 0.3% and zinc down by 0.7%.
