INTL COPPER CONF: Return of protectionism will affect copper market, say panelists

Copper product manufacturers are already suffering from the growing trend for protectionism, panelists at the Metal Bulletin Copper Conference said, and prices could suffer if global trade founders in the coming years.

The physical steel and aluminium markets are reeling after the United States said it intends to introduce tariffs on imports of 25% and 10% respectively.

The LME three-month copper price has dropped more than $200 per tonne from its February highs to $6,915 per tonne on Thursday March 8 in part because of the growing threat of stronger restrictions on trade and in turn on growth.

Protectionism is a growing concern for copper market participants, panelists at the conference in Madrid said.

“Protectionism is back and it’s back for a long period... we need to get accustomed to that idea that tariffs are something we have to start living with again,” Panos Lolos, head of commercial at Greek copper pipe maker Halcor, said.

“If there is a tariff for steel and aluminium, it will arrive soon on copper, but we are already suffering for the past two years,” Marco Calamia of Italian semi products maker KME Group said.

The US is a net exporter of copper while it relies heavily on imports for commodity-grade aluminium and steel. But other countries have already have protective measures in place.

“It’s a myth that protectionism is back because of the new US administration. Even within the EU we have protectionism - Turkey and China are also using this,” Lolos said.

As well, Canada initiated in October an anti-dumping investigation into copper pipe imports from Vietnam. Turkey is conducting a similar investigation into imports of copper pipe from Greece.

“It’s maybe not official but we have a lot difficulty to sell our copper products in the US from Europe - there is not a tariff but there are anti-dumping measures,” Calamia said.

Global growth worries pose risk to copper price
The threat posed by escalating trade sanctions and tariffs to burgeoning global growth puts copper prices at risk of falling further.

“We’re seeing a lot of concern about how these trade escalations play out - it’s what is been driving the market for the last two weeks,” ING Bank Commodity Strategist Oliver Nugent said.

Global economic growth has been a leading driver of copper prices up to $7,200 per tonne in December and February, analysts - including Metal Bulletin’s Boris Mikanikrezai - said.

“[Contraction] would almost certainly impact on the copper price as well, based on the correlation between growth and prices,” Bank of America Merrill Lynch strategist Michael Widmer said.

“[But] I wouldn’t take announced measures at face value - it’s an opening gambit. Implementation may be different,” he pointed out.

What to read next
Fastmarkets proposes to extend the shipment window of its alumina index inferred, fob Brazil, to allow for greater inclusion of reported liquidity, and to increase the frequency of publication to weekly.
Following a month-long consultation period, Fastmarkets has amended the methodology for the bi-weekly assessment of the aluminium P1020A main Japanese ports (MJP) spot premium, to include domestic tenders and deals from the Japanese market.
Fastmarkets proposes to discontinue its ferrous scrap consumer buying price for cast iron borings in Pittsburgh due to a lack of liquidity.
Fastmarkets is proposing a realignment of its consumer buying price for ferrous scrap No1 busheling in Cincinnati and Pittsburgh, effective from the May 2023 monthly settlement.
A drive by electric vehicle (EV) manufacturers to improve the affordability of their cars may upend an expectation by some market observers that future EV dominance of automotive production will sharply reduce demand for special bar quality (SBQ) steel
The publication of Fastmarkets’ US rebar prices took place earlier than scheduled on Wednesday March 22 due to a reviewer error.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.