Copper rod prices have seen a rise, particularly in the U.S., fueled by recently imposed tariffs and ongoing supply tightness. In China, while prices climbed modestly, domestic demand continues to outpace supply, pushing inventory levels to a five-year low.
Copper rod prices in China saw a slight uptick in mid-August, predominantly due to an ongoing tight supply situation. In contrast, the USA market witnessed a far larger increase in copper rod prices, due in large part to newly implemented tariffs on copper products.
Market conditions for raw material copper rod continue to show sustained tightness. The increase in spot copper concentrate TC index did enable a small ecosystem of supply slackening, however, given the firm supply context, prices stayed flat. In the domestic market, refined copper produced continued to hold flat - this is a significant variable for copper rod manufacturing. Shanghai copper rod inventories increased over a two-week period and came in at 76,800 tons - the lowest in five years - suggesting continuing demand when supply is limited.
Secondary copper rod plants continue to report a lack of current spot supply. Regulatory changes will likely mean these companies are reducing production or shutting down. The combination of an ongoing tight supply of raw materials and uncertain policies has led to a pessimistic production outlook at secondary copper rod plants.
The strong growth of refrigeration and air conditioning valve market with national subsidy policies has led to 43,601.1 thousand units (5.7%). In this way, the demand for valve shipments of related occurrences supported copper rod prices. The increase in copper rod prices by mid-August of 0.5% was as a result of valve shipments. We foresee more high-level adjustments in the short run.
In the week ending August 15, copper rod prices in the US rose 1%. At the same time, the Copper Monthly Metals Index had a small gain of 1.18% from July to August, leaving copper prices on the edge of higher. The market was responding to the unexpected July announcement from Trump, announcing tariffs and a 50% duty rate effective August 1 that was both greater than expected and imposed sooner than expected.
Downstream, Automotive Monthly Metals Index saw a slight decrease of 0.84% as the U.S. automotive marketplace works in very different conditions in regards to metal sourcing and procurement. Recent events, like brand new metal tariffs and trade deals, along with wild swings in aluminum and copper rod prices, have aligned with harsh warnings from automakers to develop this chaotic period.
Automakers and their suppliers are facing new cost pressures from a flurry of tariff actions. One key event was the 50% import tariff on semi-finished copper products instituted in early August, which includes copper rods. The 50% tariff is a 'reciprocal' trade action by President Donald Trump and adds to the existing 50% tariffs on steel and aluminum imports. The immediate impact was a tariff shock reflected in current pricing.
