Traders Rush to Ship Copper to the US Before Tariffs Kick In

Earlier this year, President Donald Trump directed the Commerce Secretary to examine imposing tariffs in a review of foreign copper’s impact on the U.S. As copper prices continued to rise in the United States, traders like IXM SA, Hartree Partners LP, Trafigura Group, Mercuria Energy Group, and Glencore significantly increased their import volumes. 

At the start of this month, Trump announced that a 50% tariff on copper would be imposed on all imports as from August 1st. 

Now, latest reports reveal that roughly 4 ships transporting copper are making their way towards American ports, attempting to avoid import tariffs that will come into effect at the start of next month. These shipments depict the last-minute rush by traders to seize an opportunity that has upended the international copper market from the time President Trump proposed the tariffs. 

Data from Kpler shows that Kiating departed the Townsville port this past week having 8,000 tons of refined copper. The bulk carrier is expected to arrive in Hawaii before July 30th. The data shows that the bulk carrier was originally destined for New Orleans but at the last minute changed its stop to Hawaii. This change reduced travel time by nearly twenty days. 

Kpler’s lead dry-bulk shipping analyst, Ben Ayre, notes it’s difficult to predict how efficient customs clearance will be in Hawaii, as the cargo rarely goes there. 

Over in South America, a trio of vessels packed with copper from Chile is also racing to reach American ports. Latest shipping data shows that the BBC Campana is docked off the northern coast of Chile while BBC Norway was anchored in Panama. 

Louise Auerbach, another cargo ship, is close to the Buenaventura port headed for Florida. It expects to reach Tampa by July 28th. 

If these vessels reach American ports before July 31st, their owners may evade paying millions in taxes. To maximize their chances of beating the tariffs, shipping firms can clear all cargo at the first U.S. port they reach. They can further pay for priority berths in customs lines, slashing waiting times from days to hours. 

Given that copper is currently trading at nearly $9,900 per ton on the London Metal Exchange, a 50% tariff would mean that buyers in the United States would need to pay an additional $4950  for each ton to customs to import the red metal into America. 

In theory, traders could earn almost the same profit if they bring in the metal before the tariffs take effect in under two weeks. 

Copper industry players like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) could be watching this rush to beat the tariff implementation start-date and wondering whether throwing international trade out of whack with such stiff tariffs will really attain the objectives that the U.S. administration stated. 

NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF 

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