Hindustan Copper share price is in focus and the share price has slipped nearly 3% intra-day as US President Donald Trump said that he would announce a 50% tariff on copper. US Commerce Secretary Howard Lutnick said shortly afterwards the copper tariffs would likely be in place by the end of July or August 1.
The move in the Hindustan Copper share price is particularly interesting, as the stock has gained over 13% since the Tariff buzz began. In the last 1 year, however, Hindustan Copper is down 22%. Even the Vedanta share price has been under pressure as a result of this announcement. Hindalco share price also saw significant selling pressure. Overall the entire list of metal stocks are under pressure, with Hindustan Copper seeing the maximum cut. Both the BSE Metal Index and Nifty Metal are also down with about 1% cut each.
Why higher tariff for copper a worry for Indian companies
The sharp 50% tariff on copper could be a source of worry as it may impact cost of wires and cable manufacturing units in the country where copper comprises the largest raw material used and is often accountable for over 70% of the cost. The impact of higher input cost on the margins is also a source of worry for the investors.
How international copper prices fared?
US Comex copper futures surged over 14% to a record high. Meanwhile, Copper prices on the London Metal Exchange and the Shanghai Futures Exchange slipped as the announcement of US copper tariffs signalled an end to a months-long arbitrage trade that had drawn the metal from global markets.
Reuters quoted Beijing-based metals analyst, who is not authorised to speak to media and highlighted that “The announcement is like a loud thunder in the middle of the night, very sudden, and a 50% tariff is much higher than the expected 25%.”
Copper prices and tariff buzz
Since the tariff investigation was announced in February, Reuters report indicated that traders have shipped copper out of warehouses around the world to the US in anticipation of the higher prices. Comex inventories are at the highest level since 2018.
“There is almost nobody in Asia buying copper for delivery to the U.S. right now given how little time there is before the deadline,” according to Michael Wu, a copper analyst at Shanghai Metals Market. Speaking to Reuters he added that the shipments from Latin America are likely the only ones able to make the deadline.