Now a 50% tariff has been announced and the market has gained a sense of certainty, J.P. Morgan Global Research expects the front-loading of imports will begin to unwind, with the U.S. going through a multi-month destocking cycle. This would see U.S. refined imports falling to minimal levels, shifting greater supply to Asia as well as the rest of the world. However, this greater supply flow will likely coincide with lower Chinese copper demand in the second half of 2025 due to a slowdown in housing completions, a decline in air conditioning and white goods requirements and a significant reduction in solar installations due to regulatory changes. This drop in demand will give the market some more breathing room.

 “We think the second half of 2025 will bring payback, unwinding the front-loading dynamics and reducing demand, leaving us more cautious on copper prices over the balance of the year,” Shearer said.  

With the U.S. hanging back on copper imports, there will be an abrupt shift in trade flows. “Copper will be diverted away from the U.S. and back to the rest of the world, helping to replenish LME inventories, loosening LME spreads and bringing about a stiffer headwind for LME copper prices over the balance of the year,” Shearer added.

With more clarity around copper tariffs and timelines, J.P. Morgan Global Research expects the London Metal Exchange (LME)/Commodity Exchange (COMEX) arbitrage to widen further, moving toward a 50% premium as COMEX prices rise and LME prices decline.

Potential wildcards: What could cause the copper market to change course?

These are some of the scenarios to watch, which could skew dynamics and change the direction of current copper forecasts:

1. A ban on U.S. copper scrap exports. Better utilization of domestic copper scrap is one possible mechanism to reduce U.S. dependence on imported copper. Over the past three years, the U.S. has exported around 540-580 kilo metric tonnes (kmt) of copper contained in scrap. While exports have been falling, removing this capacity from the market entirely would cause fundamental shockwaves and it would likely take at least two or three years to build out new U.S. secondary capacity. Therefore, if tariffs are accompanied by a ban on copper scrap exports, this would significantly tighten global supply and bullishly shift J.P. Morgan Global Research’s price outlook for LME copper. 

2. Substitution away from copper. Materially higher U.S. copper prices could drive increased substitution away from copper. While structural electrification trends remain supportive, substitution is a possibility and could challenge demand growth.
3. Tariff delays. While President Trump has set August 1 as the start date for 50% copper tariffs, changes or delays could still be possible. In this case, the U.S. would likely continue to pull in excess copper imports, draining supply from the rest of the world and creating an even sharper hangover from this greater pull‑forward.
4. Oil price shocks. Amid conflict in the Middle East, the possibility of a stagflationary shock to oil prices remains a bearish risk to base metal demand, though the bullish supply consequences for aluminum could be more significant.