Copper surges to record high on Trump's 50% tariff warning; Here is how it impacts global markets

Copper, the industrial metal used widely used in making electronic gadgets, auto, military and aviation parts among its many other industrial uses, surged more than 12% on Comex to hit a record high after President Donald Trump said he will announce a 50% tariff on copper on Tuesday, hoping to boost US production of the metal.

Copper is seeing its price rally amid elevated demand driven by the global transition to clean energy, electric vehicles, and digital infrastructure. The sudden tariff move is expected to further disrupt global copper supply chains and intensify market volatility, analysts said.

The United States secured key copper supplies from Chile—the world’s largest copper producer. Chairman of Chilean state miner Codelco Maximo Pacheco expressed concern and confusion over the announcement.

Analysts say if implemented, the 50% tariff could trigger a reshuffling of global copper supply chains. Meanwhile, countries which are currently exporting to the US may direct their shipments to Asia and Europe, where demand is robust with low trade barriers. Simultaneously, nations granted exemptions or those with trade agreements could become key suppliers to the US.

The uncertainty around the scope of the tariffs has added to the market uncertainty. Analysts expect volatility to continue until US releases more details regarding product coverage, implementation timelines and potential exemptions.

Impact on Indian markets and metal stocks

India exported $329.43 million worth of copper in 2024, according to the United Nations COMTRADE database. Although India is not a major copper exporter to the US, the global market volatility and sentiment spilled over to Indian markets.

Shares of metal companies such as Hindustan Copper, Hindalco, Vedanta, Tata Steel, and SAIL were trading lower in range of 2%-4%. The gauge of metal stocks on the National Stock Exchange dropped 1.62%.

Even before Tuesday’s tariff shock, copper was witnessing strong buying interest on the back of rising demand from EVs to faster adoption of renewable energy projects.