China Builds "Copper Empire" to Counter US Tariffs and Wall Street Speculation

In a strategic move to secure its industrial future, China is building what analysts call a "Copper Empire" in Shandong province. This plan, detailed in a report by the South China Morning Post and discussed in a video by Inside China Business (@Inside_China_Business), aims to create a key global hub for copper smelting and supply chain management. The initiative is a direct response to a chaotic global copper market, where record-high prices are driven not by industrial demand but by financial speculation and new US trade policies.

The core issue stems from recent US tariffs on copper. A 50% tariff on semi-finished copper products, while exempting raw copper, has created perverse market incentives. Traders are now incentivized to ship raw copper to US warehouses to collect massive price premiums, rather than supplying manufacturers. This has led to a record 450,000 tons of copper being stockpiled in New York warehouses, squeezing global supply for industries that actually use the metal to build infrastructure, electronics, and green energy technology like electric vehicles and wind turbines.

China, as the world's largest copper consumer, is uniquely vulnerable to this volatility. Despite having strong diplomatic and trade relationships with top producers like Chile and Peru, its "just-in-time" purchasing model is threatened by financial players diverting physical supplies. The new strategy involves developing Shandong as a central processing and distribution node. This will allow China to better manage its own substantial copper needs for domestic manufacturing and for its Belt and Road Initiative projects, creating an alternative supply chain less susceptible to Wall Street speculation and US tariff policy.