RE: Copper31 Jul 2025 13:10
Interesting article from fast markets.com
US copper scrap markets look to transition to LME vs COMEX
US copper scrap market participants are shifting from COMEX to LME pricing in response to extreme price volatility and a new 50% copper import tariff. The change is influencing discount formulas, export strategies and long-term trading dynamics across the sector.
July 15, 2025
By Kirstyn Petras
Base metals Copper Scrap and secondary Supply chains US election
US copper scrap market: shifting from COMEX to LME pricing due to volatility and tariffs
Copper pricing trends: exploring how global benchmarks like the LME impact US discount rates
Tariff impact: examining how new trade policies are reshaping the US copper scrap market
Why the US copper scrap market is shifting away from COMEX pricing
US copper scrap market participants have said they are looking to transition to using the London Metal Exchange instead of COMEX copper contracts as the underlying price for calculating discount rates — a move that has gained support following dramatic spikes to COMEX rates in the week to Friday July 11.
“A lot… on the consumer side are transitioning or beginning to determine how to switch,” a copper scrap source said on Friday. “The LME is going to feel like the international number in the US and otherwise.”
Conversations contemplating such a switch have been ongoing for some months amid volatility in COMEX prices and historically high arbitrage levels between COMEX and LME rates. But these conversations have ramped up following new statements from the Trump administration on Tuesday, July 8 that copper imports will be subject to a 50% tariff.
A second source noted on Thursday July 10 that several mills had started to switch from using COMEX to calculate rates to using the LME, or even flat out refusing to use COMEX pricing, saying “everyone is going to switch to LME-based formulas, you can see it coming.”
How tariffs are influencing the US copper scrap market’s pricing decisions
After President Donald Trump said “I believe the tariff on copper, we’re going to make it 50%,” on July 8, the Chicago Mercantile Exchange “went ballistic” according to Fastmarkets analyst Andy Farida, and on Wednesday July 9 “spats of fresh copper inflow have capped the upward price momentum at $10,000 per tonne and flipped the previous triple-digit backwardation into a small contango of $2 per tonne,” Farida said.
According to Marex analyst Ed Meir in a report published on July 9, “the reaction in the copper market to Trump’s announcement was fast and furious.”
An additional round of tariffs was announced by Trump late on July 11, of 30% tariffs on both Mexico and the EU, effective August 1. US-Mexico-Canada Agreement (USMCA) compliant goods are still believed to be exempted, according to Adam Schaffer, vice president of international trade and global affairs for the Recycled Materials Association (ReMA). The announce
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