The global copper rod market experienced significant price increases in the second week of March, driven by a confluence of factors in both China and the United States.

Key Takeaways

• Copper rod prices rose in both China and the US during the second week of March, continuing the previous week's upward trend.
• Increased demand from the home appliance sector drove up Chinese prices.
• Concerns about potential tariffs (25% suggested by President Trump) led to stockpiling by downstream manufacturers, pushing US prices higher.

China

Domestic copper rod demand, especially from the home appliance sector, continued to surge in March. This surge in home appliances production has bolstered demand for enameled wire, a key downstream product of copper rods, with companies reporting healthy order volumes.

With the arrival of ‘Golden March and Silver April period’, operating rates among downstream enterprises are expected to rise further, sustaining demand for copper rods in China. Additionally, China has issued more licenses to aid local copper smelters to export metal tax-free and paving the way for greater overseas sales at a time of upheaval in the global market.

Chinese copper rod prices rose by 1.2% in the second week of March, despite a 2.5%-point drop in secondary producer operating rates to 30.88%. Accelerated cargo pick-ups by traders significantly reduced secondary producer inventories, with some reporting near-depletion.

Panama has cleared 120,000 metric tons of stranded copper concentrate for export, a move that will benefit major importer China. Conversely, leading copper producer Codelco anticipates production to remain at or slightly below last year's levels this quarter due to maintenance at its El Teniente mine, despite maintaining its annual growth projections

USA

US copper rod inventories witnessed a decline with downstream manufacturers accumulating stocks ahead of potential tariffs. Similarly, requests to withdraw copper from LME have increased with traders expediting shipments to the US to capitalize on pre-tariff opportunities. As of March 12, copper inventory in LME warehouses declined by 9% from the beginning of the month. 

US copper rod prices increased by 1.5% in this period, sustaining the upward trend following President Trump’s suggestion of 25% tariff on copper imports. This announcement resulted in a significant surge in Comex copper prices, creating a wide gap as compared to London and Shanghai markets.

In late February, the US President ordered investigation into copper imports on grounds of national security. This could be the first step towards imposing the expected 25% tariff on copper imports. According to our analysts, copper rod prices in the US are expected to continue moving upwards as a result of impending tariffs, slower mine supply growth and robust electrification demand.