US Copper Policy Creates Paradoxical Trade Flows
US copper policy is having an unexpected consequence: record refined imports and exports of US-mined concentrate. In July, the country imported a record 225,094 tonnes of refined copper and copper alloys, up 78% month-on-month and 8% year-on-year.
The surge in refined imports has created a paradox. The US is trying to reduce its dependence on imported copper while simultaneously sucking in unprecedented volumes of refined metal. This front-loading has led to a situation where the country is importing half of its copper requirements, with refined imports increasing sixteen-fold since 2015 as domestic production declines.
Rio Tinto's giant Resolution Copper project in Arizona could eventually supply more than a quarter of US copper demand. However, weak domestic smelting economics mean some of its concentrate may ultimately have to be exported for processing overseas. Treatment and refining charges have turned negative, making investment in US processing capacity challenging.