RE: Copper futures goes nuts....10 Jul 2025 00:00
Hi dusty, as I understand it Trump is seeking to slap the tariff on raw materials like copper. An advanced economy like the US basically takes cheap raw materials and uses advanced techniques and those materials as inputs to produce sophisticated things to export like robots, arms and Teslas.
So you would think it would be suicide to slap a tariff on those raw material imports and pass the cost onto their own producers.
But Trump has spotted that China has a near monopoly on smelting metals and if they control the world's copper supplies for example, they can use that to their trade advantage. As you would.
His aim is to make US producers viable again by inflating the copper price (and other metals) so that they can remove this dependence.
How this fits together for small assets like ours is where I am struggling. My crude knowledge is that minerals are mined, usually crushed on site, go through some chemical processes then what is left after the s.lag is separated goes off to smelters to turn into end product like copper and gold
Smelting is energy intensive and China is the world leader, they have zero issue using cheap coal to do this.
So my query is basically will the US just tariff the finished product or all of the things that go into the finished metals? That is crucial to understanding where explorers and their potential suitors stand. Will the likes of BHP chase assets if they can't ship stuff to America to be finished?