Chinese Copper Supplier Says US Demand Can Bear Trump’s Tariffs

7vkx3vq2a9eihiupzwnm]1bh_media_dl_1.png Comex, London Metal Exchange

Article content

(Bloomberg) — Chinese copper manufacturer Zhejiang Hailiang Co. is betting its American customers won’t balk at higher prices if the US follows though on placing tariffs on the refined metal.

Article content

The Hangzhou-based maker of copper tubes has expanded to locations from Indonesia to Morocco to get closer to clients and escape trade restrictions. Its operations include a plant in Houston that’s nearing full capacity after delays to construction during Covid.

Article content

Article content

Article content

“We’re not concerned about the cost increases because we can fully pass those onto clients,” Yan Yuhao, a trader and senior analyst with the company, said in an interview. “US consumers are very different from Chinese consumers. We are amazed by the resilience of US spending power.”

Article content

Article content

The Trump administration’s looming decision on whether to tariff refined copper has electrified the global market, juicing the premium paid for metal in the US and creating lucrative opportunities for traders. While the policy is aimed at shoring up domestic copper production, it also threatens to fan the inflationary pressures that Washington has struggled to control.  

Article content

Yan said the need to cut dependence on foreign copper, a metal crucial to hi-tech manufacturing and power transmission, means the administration is highly likely to impose tariffs sooner or later.

Article content

But the idea that heftier costs for refined copper won’t derail demand is relatively alien to Hailiang’s home market. Until the Iran war, Chinese factories had only experienced deflation since the pandemic ended. That’s left buyers far more resistant to chasing copper prices higher during rallies.  

Article content

Article content

Hailiang’s Texas plant makes tubes for autos, plumbing and air conditioners and is close to full capacity of 90,000 tons a year, said Yan. Trump’s tariffs on semi-finished copper last year have already boosted the company’s fortunes and its stock in Shenzhen has more than doubled over the past 12 months.

Article content

On the Wire

Article content

Guangzhou Futures Exchange is considering launching China’s first futures for cobalt, a metal used in batteries as well as the aerospace and defense industries, according to people familiar with the matter.

Article content

Jinko Solar Co., one of the top five solar manufacturers in China, is looking to recoup expenses this year, as government measures alleviate the chronic overcapacity that has plunged the sector into more than two years of deep losses.

Article content

China’s exports of electric vehicles climbed to an all-time high in May, extending a surge that has been fueled by higher oil prices linked to the war in Iran. Overall exports of electricity technologies, including solar panels and batteries, remained near record levels.

Article content

China is strengthening the ways whistleblowers can report violations of export controls on strategic minerals and related dual-use items.

Article content

This Week’s Diary

Article content

(All times Beijing)

Article content

Thursday, June 25

Article content

Article content

Friday, June 26

Article content

Article content

Saturday, June 27

Article content

Article content