The US would need at least a decade to achieve copper self-sufficiency through domestic production and processing, meaning continued reliance on imports in the short and medium term despite a 50% import tariff set to begin on August 1, according to Pedro Pablo Lavín, a former commercial executive at Chilean mining company Enami. “Mines take too long to develop for this to be achieved in less than a 10-year time horizon,” Jefferies analysts wrote on July 8, echoing the sentiments and timeline of many major participants in the industry over the last few years.
US copper tariff highlights supply gap as imports fill domestic shortfall
This long lead time matters because US copper consumption currently stands around 1.6 million tonnes per year, while domestic mine production covers only about 1.1 million tpy — leaving the country reliant on imports for roughly 500,000 tpy, or over 30% of its needs, according to the US Geological Survey (USGS).
Without accelerated investment in mining, smelting and refining infrastructure, the Section 232 tariffs may amplify price pressures without meaningfully reducing dependency on foreign supply in the near term.
The arbitrage between the London Metal Exchange (LME) and Chicago Mercantile Exchange (COMEX) has already seen historic shifts since the tariff investigation was first announced. In the short term, the tariff could trigger arbitrage spikes as US importers seek to front-run the policy shift, Lavín said.
As of Monday July 21, the COMEX premium reached fresh record highs around $2,600 per tonne, with the COMEX copper M1 (July 25) settling at $5.6105 per lb versus the LME copper cash official at $4.4330 per lb, representing a spread of $1.18 per lb, or $2,596 per tonne (26.6%). This compares to spreads of around $1,050-$1,300 per tonne seen in late June and early July before the tariff announcement on July 8.
US 50% tariffs “a kneejerk reaction”
Long-awaited news on the Section 232 tariff came when US President Donald Trump said, “I believe the tariff on copper, we’re going to make it 50%,” during a Cabinet meeting on July 8. Later that day, US Commerce Secretary Howard Lutnick said the tariffs would be in place by August 1.
Market reaction was quick and steeped in uncertainty as the COMEX went “ballistic,” in Fastmarkets analyst Andy Farida’s words. Analysts believe the tariff announcement was a kneejerk reaction to the LME copper price, which breached the psychologically significant $10,000 per tonne mark on July 1, Farida said.
“Do we take Trump seriously; do we take him literally? Will he change his mind this afternoon or tomorrow morning? For a market that is import-dependent, is this really going to kick in on August 1?” a US-based trader said earlier this month.
For months, Fastmarkets has heard from market participants that the historic and hard-to-predict arbitrage has distorted the US market since the first quarter of 2025, creating an unusual situation where spreads in the US premium have been extremely wide and, at the same time, difficult to pinpoint.
“There is no number” has been the mentality of some sources since April as market participants awaited Trump’s announcement and kept watch over the arbitrage.
US importers have been accumulating inventory to front-run the tariff implementation, with an estimated 600,000 tonnes of cathode stockpiled ahead of the August 1 deadline, according to Lavín.
“Too much copper has been imported in the first quarter and will need time to be consumed,” a trader told Fastmarkets last quarter.
“This [stockpiling] has been carried out by North American importers for several months,” Lavín said, adding that this inventory build could result in significantly reduced imports from August through December 2025, which “should cause the COMEX price to decrease as well.”
Plugging the scrap outflow
Since November, and the results of the 2024 US presidential election, market sources have been pessimistic regarding the impact on copper scrap markets.
US copper scrap exports reached a five-year high in 2024, totaling 1,057,499 short tons, up by 9.17% from 2023, according to data from the US Department of Commerce.
Of those tonnes, the US shipped 41.35% to China, and China increasingly asserted its position as the top importer of copper scrap, with market share growing considerably since 2020 alongside the loosening of import restrictions on recycled material.
But in 2025, these exports to China have fallen considerably, in line withs source expectations following new tariff announcements. US exports of copper scrap to China fell 53.41% in January-May 2025 compared with the same 2024 period, and with market share down to 20.70% over the first five months of 2025.
However, overall US copper scrap exports have only fallen 2.61%, with one source saying, “it seems everyone else in Southeast Asia is picking up the slack” left from China’s pullback from the US market.
Though Fastmarkets principal analyst Andy Cole highlighted the growing momentum on the recycling front: “Existing secondary smelters are only operating at about 21% of their capacity” — a clear indicator that “a lot of secondary refined copper production growth could be achieved just by utilizing this capacity that already exists.”
He added that several new US recycling plants are coming on line: Aurubis is building its 90,000 tpy Richmond, Georgia, multimetal recycling smelter (commissioning expected in the first half of 2024), Wieland is ramping up its Shelbyville, Kentucky, plant (groundbreaking in mid-2022 with operations due late 2023), and Exurban is planning a $340 million e-scrap smelter in Indiana with a feedstock capacity of 45,000 tpy — expected to come on line in the mid-2020s.
These announcements show that, even before long-lead new primary smelters arrive, there is meaningful room to boost domestic refined copper production via underutilized secondary capacity — so long as investments are realized in a timely fashion.
Market participants have noted differing views of the US reliance on exports, with some acknowledging the reliance built into the system and others pushing more for the resurgence of US copper refining.
“The increase in local copper price due to the tariff increase will be a magnificent incentive to develop internal recycling capacity and reprocess the scrap generated in the US instead of exporting it,” Lavín said. However, he noted that “the investments required need time to be developed, so their effect would be in the medium and, primarily, long term.”
Copper scrap sources throughout 2025 have noted an uptick in domestic material, with supply outstripping demand, keeping the market in a state of imbalance.
“I think it is great that… the copper can be kept domestically, but at what long-term cost?” a second copper scrap source said.
Copper scrap is part of the Section 232 investigation; authorities will assess whether dependence on imported scrap weakens national resilience. However, Cole pointed out that the US is a significant exporter of copper scrap.
“A strategy to tax imports in order to promote greater domestic production could be supercharged by an export tax or export ban,” he said, highlighting Section 232’s oversight on exports of copper raw materials.
Stay ahead of the curve—explore the latest US scrap trends in our in-depth market outlook. Gain exclusive insights from industry participants and discover what’s shaping the month ahead.
US-linked copper projects advance; long road ahead
Current domestic processing capacity in the US falls far short of consumption needs. The US currently operates just two primary copper smelters — in Arizona (Grupo Mexico/Asarco) and Utah (Rio Tinto/Kennecott) — with rumours of a third facility (Asarco’s Hayden smelter in Arizona) being restarted after multi-year downtime. Fastmarkets reached out to Asarco, but did not receive a response at the time of publication.
“Made in America” has been a topic of growing importance since Trump took office in January. And while there is currently an oversupply of imported copper — enough to accommodate US physical demand for a few months, according to sources — the US does import almost half of its copper, nearly 1 million tpy, with the majority of imports coming from Chile, Canada and Peru, according to the USGS.
Speaking at the Recycled Materials Association national convention in May, Copper Development Association president and chief executive officer Adam Estelle noted that “on average” it takes “29 years” in the US “from the point of discovery for a mine to start producing,” calling it the “second largest timeline in the world.”
The tariff could provide new momentum for Antofagasta’s Twin Metals copper-nickel project in Minnesota, which remains in legal limbo after a federal court dismissed the company’s lawsuit challenging the Biden administration’s cancellation of its mineral leases — a decision now under appeal. Despite federal obstacles, the Minnesota Department of Natural Resources approved an exploration plan in April 2024, allowing limited groundwork to proceed.
Meanwhile, Rio Tinto’s Kennecott operation in Utah represents a significant domestic expansion opportunity, with the company announcing major investments including $920 million for the North Rim Skarn underground mine development, according to Rio Tinto’s second-quarter 2024 report, and $1.5 billion for open-pit extension from 2026 to 2032.
Several other copper companies have recently announced new US-based endeavors and/or provided updates on upcoming made-in-America copper projects, including Hudbay Minerals’ Copper World and Gunnison Copper’s Johnson Camp Mine and Gunnison Project.
Other potential new mining projects of note include Resolution Copper, a joint venture owned by Rio Tinto and BHP; Northern Dynasty Minerals’ Pebble Mine in Alaska; and Kinterra Capital’s Pumpkin Hollow mine in Nevada.
“[This copper] is going to go straight into the domestic supply chain, to be sold and consumed only in America to domestic industries in the defense, manufacturing and energy sectors,” CEO Stephen Twyerould said during Gunnison Copper’s second-quarter earnings call in May.