Copper traders were caught off guard on Wednesday after refined copper was excluded from President Donald Trump’s new tariffs, leaving them with large stockpiles and rapidly falling prices.
On Wednesday, copper futures on New York’s COMEX exchange plunged 20% in one day — the largest intraday drop since the contract began trading in 1988.
The sell-off followed the Trump administration’s decision to exempt refined copper from a sweeping 50% import tariff that takes effect August 1.
Instead, the tariff will only apply to copper products like pipes, wires, and sheets — not to refined copper, the most widely imported form of the metal.
The decision stunned traders who had spent months shipping refined copper into the US in anticipation of the tariff. Copper is a major industrial metal used in a wide range of applications and sectors, including construction and transportation.
When Trump first suggested copper duties earlier this year, COMEX prices surged and traders rushed to import the metal before tariffs set in.
“Prices have been rising this year largely because the market has been front-running the tariff policy and not because the demand picture has been improving or because the supply has actually been tightening,” wrote Ewa Manthey, a commodities strategist at ING.
Copper futures had been trading at a 28% premium on the US exchange compared to the London Metal Exchange — a spread that crashed overnight.
Now, traders face a potentially massive inventory overhang.
Copper stockpiles at COMEX-registered warehouses soared 170% to 253,431 short tons — the highest level in 21 years, per exchange data.
By contrast, inventories at LME facilities have dropped roughly 50% this year, a sign of how much metal was diverted to the US.
“There is now an excess inventory in the US, and that stockpile might now be re-exported,” wrote Manthey.
“This will be bearish for LME prices with more copper now showing up in LME warehouses,” she added.
Meanwhile, the White House has not ruled out future tariffs. It said the Commerce Department recommended a phased universal duty on refined copper: 15% in 2027 and 30% in 2028.
Trump ordered a market update by mid-2026 to determine whether to proceed.