The United States’ decision last week to exempt refined copper from import tariffs contrasted with its earlier move to impose steep duties on aluminum, highlighting the central role of electricity costs and the dynamics of lobbying pressure in shaping US policy.

Washington surprised the copper market by imposing taxes only on imports of semi-finished products such as wires, tubes, and sheets, while leaving refined metal untouched. Since the announcement last Wednesday, copper prices on Comex have fallen by more than 20%.

In contrast, refined aluminum shipped to the United States since June has faced a 50% tariff, as domestic producers contend with higher electricity costs compared to copper producers.

Tariffs on metal production fall under broader US efforts to revive domestic smelting capacity and reduce reliance on imports.

Century Aluminum was among the strongest advocates of these duties, arguing they are essential to protect what remains of America’s aluminum smelting industry. The company said in a June statement: “Century Aluminum applauds President Trump’s steadfast defense of domestic production of critical metals through raising aluminum tariffs to 50%.”

The exemption of refined copper, however, reflects its importance to US industry and the influence of the copper sector, including Freeport-McMoRan, which warned earlier this year that a global trade war could damage US copper production.

The company told the US government in a memo: “A global trade war could lead to slower economic growth... slower growth in the United States or globally would negatively impact copper prices, which could threaten the sustainability of the domestic copper industry due to its high cost structure.”

For aluminum, the main argument in favor of US tariffs relates to the share of energy in smelting costs. Macquarie estimates that energy represents about 50% of the cost of producing primary aluminum, compared with 30% for copper.

Macquarie analyst Marcus Garvey said: “There is no economic justification for building any new aluminum smelting capacity without significant intervention. Even with intervention, it may not be enough.”

Analysts note that one of the biggest challenges for potential investors in US aluminum smelting is the difficulty of securing long-term power purchase contracts at competitive rates, especially given higher energy costs in the United States compared to producing countries such as the UAE, Bahrain, and the world’s largest producer, China.

High electricity costs are the main reason the number of active smelters in the United States has fallen to just four today, compared with 23 in 1995.

According to US Geological Survey (USGS) data, US primary aluminum production totaled 3.35 million metric tons in 1995, fell to 1.6 million tons in 2015, and declined further to just 670,000 tons last year.

Most US stock indexes fell at the start of Monday trading amid profit-taking by investors following last week’s strong gains on Wall Street.

This came after remarks by Federal Reserve Chairman Jerome Powell at the Jackson Hole conference on Friday, where he hinted at an upcoming rate cut, with estimates showing a probability of over 90% for a cut at the September meeting.

Later this week, Nvidia will report earnings after Wednesday’s close, followed by results from Dell and Marvell Technology.

Also due on Friday are US Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge.

As for trading, the Dow Jones Industrial Average fell by 0.5% (equivalent to 216 points) to 45,420 points as of 17:50 GMT, while the broader S&P 500 declined by 0.1% (equivalent to 9 points) to 6,457 points. In contrast, the Nasdaq Composite rose by 0.2% (equivalent to 36 points) to 21,533 points.

Nickel prices fell during Monday trading amid ongoing concerns about rising global supply, while markets also monitored moves in the US dollar following remarks by Federal Reserve Chairman Jerome Powell, who hinted at an upcoming rate cut.

While base prices remain stable for now, nickel continues to show general weakness, keeping stainless steel surcharges at limited levels. Although prices have moved sideways in recent months, the longer-term multi-year trend still points downward.

At the same time, nickel inventories remain extremely high. Indonesia has maintained strong output, with nickel surpassing coal to become the country’s largest export in 2025. However, local demand there has already peaked, forcing some smelters to temporarily suspend operations amid low prices.

Although any slowdown in Indonesian supply could offer some support, the large global surplus persists, meaning smelters would need to cut production for an extended period before prices see a meaningful recovery.

Nickel stocks on the London Metal Exchange have risen by about 40,000 tons since the start of the year to reach 195,000 tons, driven by strong refining capacity from Chinese companies operating in Indonesia. Despite attempts to curb supply, overall market sentiment remains cautious, with any recovery still dependent on a major rebound in end-user demand.

Nickel market in Indonesia faces persistent surplus

Indonesia’s nickel sector remains under pressure, as government-set output quotas have exceeded actual demand, reinforcing the supply glut. Prices of nickel ore used in pyrometallurgy (thermal smelting) have declined, while nickel ore used in hydrometallurgy (wet smelting) has remained stable. High-grade ferronickel prices have also stayed steady, but smelter profit margins remain limited. Policymakers are considering potential interventions, but abundant supply and weak demand will likely cap any near-term price gains.

Chinese nickel market shows some resilience despite surplus

In China, nickel and stainless steel markets have displayed some resilience, even as overall demand remains weak and supply remains abundant. Government efforts to curb excess industrial capacity, along with expected seasonal changes in Philippine mining, may influence supply and pricing trends in the coming months.

Outlook

Markets are closely watching US monetary policy, Chinese stimulus measures, and seasonal shifts in Indonesian supply as potential factors driving nickel prices in the near term.

The dollar index rose by 0.2% at 15:24 GMT to 97.8 points, with a high of 98.0 and a low of 97.7.

As for trading, spot nickel contracts fell by 1.5% at 15:25 GMT to 14,960 dollars per ton.

Bitcoin price fell below 112,000 dollars during Monday trading, erasing the sharp gains sparked by cautious remarks from Federal Reserve Chairman Jerome Powell, while Ethereum, the world’s second-largest cryptocurrency, traded near record levels.

The world’s largest cryptocurrency last traded down 3% at 111,610 dollars as of 06:21 a.m. Eastern time (10:21 GMT). The coin had fallen in the previous session to nearly a six-week low of around 111,000 dollars, as traders took profits after Friday’s surge.

Bitcoin erases gains from rate cut bets

Bitcoin jumped above 117,000 dollars on Friday following Powell’s cautious comments at the Jackson Hole symposium, where he acknowledged rising risks to the labor market and hinted that “the shift in the balance of risks may warrant adjusting our policy stance.”

Powell’s signal of a possible rate cut in September boosted investor sentiment, driving up risk assets including cryptocurrencies. But Bitcoin later retreated as investors moved to take profits, with analysts pointing to resistance levels and a phase of consolidation as factors behind the decline.

Japanese finance minister pledges supportive framework for cryptocurrencies

Japanese Finance Minister Katsunobu Kato said on Monday that the government would work to establish a suitable environment for digital assets. He noted that cryptocurrencies could be part of diversified investment portfolios, signaling an evolving stance toward broader market adoption.

His remarks came amid ongoing efforts to clarify regulatory rules and investor protection mechanisms in the sector. The approach reflects Japan’s commitment to balancing innovation with financial stability, at a time when authorities increasingly recognize the growing role of crypto assets in investment strategies.