- The price of copper remains firm, because raffin restrictions pose a threat to the electronic industry.
- Copper trade is 5.50 USD, still 10% above its level on Monday, because the fears of tariffs persist.
- Delivery risk based on the tariff raises the alarm throughout the construction sector.
Futures copper contracts are nearly $ 5.50 per pound on Friday, sliding from the highest level of USD 5.70 during daytime time frames. Despite the slight decrease in the price, they remain 10% higher than on Monday, emphasizing indefinite fears regarding the disturbance of supply associated with the upcoming United States Trade Tariffs (USA).
50% of the copper import tariff, announced on Wednesday and took the duty on August 1, aims to consolidate the American copper industry and reduce relying on imported refined products.
The tariff announcement led to a bonus between American copper or London Metal Exchange (LME) prices to a record 25%, because foreign costumes and American prices increased.
This discrepancy reflected market expectations that the inflow of copper to the US would snail-paced down after the threats initially appeared in February.
Traders have accelerated parcels in recent months to overtake the August enforcement window. The import of imports temporarily increased American actions, but it is expected to disappear, potentially leading to domestic deficiencies, including quarter.
According to the Reuters report, the United States imports almost 50% of copper consumption, and Chile corresponds to most sophisticated copper.
Analysts warn that the US does not have sufficient refasting infrastructure to absorb the gap in delivery. Developing recent abilities can take years, suggesting that lower industries, especially construction and electronics, can face the growing costs of expenditure and delays in the scope of delivery.
The daily chart below shows copper trade in a long -term growing channel, and a mighty volume supports recent breakthrough.
The relative force indicator (RSI) softened from the level of purchase, but remains increased, the signaling continued the stubborn bias.
Immediate support is 5.03 USD, followed by a deeper support of $ 4.62 (78.6% FIB) and USD 4.29 (61.8% FIB), in which earlier consolidation zones can act as buffers in the event of withdrawal.
As the date of 1 August approaches, copper markets will probably remain unstable.
FAQ tariff
Tariffs are customs duties taken for some imports of goods or product category. The tariffs are designed to aid local producers to be more competitive on the market, providing price advantage compared to similar goods that can be imported. The tariffs are widely used as tools of protectionism, along with trade barriers and import amounts.
Although both tariffs and taxes generate government income to finance public goods and services, they have several distinctions. The tariffs are paid at the entrance port and the taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, and the tariffs are paid by importers.
There are two schools of thinking among economists regarding the utilize of tariffs. While some say that tariffs are necessary to protect national industries and solve the problem of commercial imbalance, others perceive them as a harmful tool that can potentially enhance prices in the long-term perspective and lead to a harmful trade war by encouraging Tit-For Tatt tariffs.
During the fall to the presidential election in November 2024, Donald Trump explained that he was going to utilize the tariffs to support the US and American producers. In 2024, Mexico, China and Canada constituted 42% of total US imports. According to the American office of the population, Mexico was distinguished as the best exporter by $ 466.6 billion. That is why Trump wants to focus on these three nations by applying tariffs. It also plans to utilize revenues generated by tariffs to reduce personal income taxes.
