Challenges in Chile and Peru add to global copper supply concerns
The global copper market faces significant supply concerns from Chile and Peru, two major producers accounting for approximately 35% to 40% of the world’s mined copper supply.
What’s happening: Chile recently experienced severe weather disruptions that have temporarily disrupted mining operations but highlight longer-term challenges the country is facing. Aging mines, declining ore grades and rising operational costs are slowing production growth and increasing supply concerns. Meanwhile, Peru continues to face political uncertainty, infrastructure challenges, permitting delays and social conflicts that can slow the development of new mines.
Why it matters: These supply challenges come amid concerns of a global supply deficit and a looming U.S. Section 232 tariff expansion on refined copper, causing buyers to frontload large volumes of copper into U.S. warehouses.
- Global copper inventories fell more than 95,000 metric tons in July as copper continued flowing into the United States.
- COMEX inventories rose by approximately 45,213 metric tons, while inventories at the London Metal Exchange and Shanghai Futures Exchange declined significantly in July.
- Imports of refined copper rose by 13% to 763,000 metric tons in the first five months. Domestic warehouses’ physical inventory has been steadily rising since February 2025 after President Trump announced an investigation into copper imports; since late July, it holds 58% of the world’s physical copper.
As a result, copper on the COMEX is becoming more expensive than the global benchmark. In early June, prices reached a record high of $6.70 per pound as concerns mounted. This morning, copper opened at $6.60 per pound.
Why the United States still relies on imported aluminum
Over the decades, rising energy costs have decimated the U.S. aluminum smelting industry, prompting offshoring and relocation to countries such as Canada. Domestic smelting capacity has fallen from 24 active smelters to just four since 2000.
The big picture: Investment incentives like the recently modified aluminum tariffs may support domestic smelting over time, but experts say the market will likely remain reliant on imports, keeping the Midwest premium elevated. At the same time, major aluminum producers are prioritizing investments in copper operations over aluminum.
While the United States has an established aluminum recycling and scrap industry, significant volumes of U.S. scrap are exported overseas, specifically to China. And recycled aluminum is not always a direct substitute for primary aluminum extracted from raw bauxite ore.
Zoom in: Some scrap grades may not meet the material specifications and certifications required for certain contractor applications, further limiting the industry’s ability to offset its reliance on imports.
Today, aluminum opened at $2.65 per pound.
Steel imports rise despite U.S. tariffs
Steel imports from Asia are increasing, despite U.S. tariffs, according to Steel Dynamics.
Zoom in: Asian flat-rolled sheet steel is priced at approximately half of U.S. steel, prompting more exports from Asia.
Yes, but industry executives say the domestic market is benefiting from the tariffs even with the rise in imports. Nucor shares rose 6% in late July after a reported strong quarterly result. Cleveland-Cliffs also reported higher first-quarter results, with shares up 13.1% in late July.
Why it matters: U.S. buyers often accept imported steel even with a tariff applied if domestic suppliers cannot keep up with strong demand. However, there are exceptions, such as compliance with the Build America, Buy America Act and colored pipe and larger diameter pipe.
By the numbers: The United States imported 16.4% flat-rolled steel in Q2, up from 14.4% the previous quarter but down 22% early last year.
PVC suppliers start August with a price increase
Suppliers started August with a price increase on PVC.
Why it matters: Earlier in the year, suppliers struggled to pass through price increases driven by demand from hyperscale projects; however, little by little, price increases are holding.
By the numbers: Our vendor partners are reporting good stock levels on everything 2-inch diameter and smaller. Larger diameter pipe and special radius bends have extended lead times of approximately five to six weeks.
The big picture: The Atlantic hurricane season has been relatively quiet so far as we approach the midpoint in September. North American PVC production is concentrated on the Gulf and Atlantic coasts, making it vulnerable to disruption from major natural disasters including hurricanes.
More PVC news: Prysmian has agreed to acquire Atkore in a deal valued at approximately $3.8 billion. The transaction is expected to close by the end of the year. Atkore is a major U.S.-based electrical manufacturer. Prysmian, based in Italy, has been expanding its North American presence since 2024 with its acquisition of Encore Wire.
News roundup
The Federal Reserve (Fed) voted 9 to 3 in July to keep the federal funds rate in a range between 3.5% and 3.75%. The three dissenting votes came from regional presidents who preferred to raise the target range by a quarter point to address inflation, which has been above the Fed’s 2% target for more than five years. In June, the consumer price index, a key indicator of inflation, rose 3.5% annually. Fed officials will meet again Tuesday, September 15, and Wednesday, September 16.