Copper Price Shock Drives Tunisia's Metal Deficit

Tunisia's foreign trade deficit has been largely attributed to energy, grain, and cars. However, figures for the first seven months of this year reveal a significant source of the deficit that often goes unnoticed: industrial metals.

Copper and steel combined account for a staggering TND 2.637 billion deficit, with copper being particularly noteworthy. The metal's price surge has led to a TND 1.471 billion deficit, while steel's volume increase contributed to a TND 1.166 billion deficit.

The comparison between copper and steel highlights the different mechanisms driving their respective deficits. Copper's price shock accounts for nearly eight-tenths of the additional cost, while steel's volume surge led to its widening deficit.

Tunisia's reliance on imported metals is further exacerbated by its lack of domestic resources. The country's leading export category, electrical machinery and equipment, generates a surplus driven by automotive wiring harnesses for Europe. However, this surplus is largely offset by the additional cost of copper required to produce these exports.

The situation becomes even more complicated when examining electrical imports themselves, whose unit price has risen by 8.3%. This squeeze on Tunisia's export industry highlights the fragility of its trade surplus and underscores the importance of addressing its metal dependence.