By Pratima Desai

LONDON, July 31 (Reuters) - Copper trading on Comex was halted on Wednesday, the exchange said, reflecting the magnitude of the price plunge of more than 20% in an hour after the U.S. announced its decision not to apply tariffs on imports of the metal.

Copper HGc2 traded on Comex, part of the CME Group CME.O, crashed 22% to $4.5030 a lb or $9,927 a metric ton after the announcement, sparking a rapid unwinding of long positions that triggered the circuit breaker.

Trade stopped for two minutes between 1314 and 1316 Central Time (1814 and 1816 GMT).

This was the second time in less than a month that circuit breakers were triggered in the copper market. On July 8, prices spiked nearly 18% after President Donald Trump said he would announce a 50% tariff on copper imports.

"The market got ahead of itself," said one copper trader. "Once it became clear that refined copper was exempt, the balloon deflated very quickly."

The United States said on Wednesday 50% tariffs would apply to copper pipes and wiring from August 1, but the restrictions left out copper materials such as ores, concentrates, and cathodes.

"For metals markets, the range in which prices can move is reset continuously on a rolling 60-minute lookback window. If markets move +/- 10% in that time, a 2-minute halt is initiated," CME Group said in a written comment.

"We can confirm that a dynamic circuit breaker for copper futures and options was triggered yesterday at approximately 1:14 p.m. CT, when the market halted and transitioned into a two-minute pre-open state."

Comex copper traded on Thursday around $9,600 a ton and its premium over the London Metal Exchange benchmark contract CMCU3 has narrowed to around $10 a ton compared with records around $3,000 a ton earlier this month.

That premium had attracted copper MCUSTX-TOTAL from around the world since the tariffs on metal were mooted by Trump in February, much of it stored in LME-approved warehouses.

(Reporting by Pratima Desai; editing by Rod Nickel)

((pratima.desai@thomsonreuters.com; +44 207 513 5681;))