Global copper prices rose strongly, with London Metal Exchange (LME) copper breaking the $14,000 per ton mark on Tuesday (4th), hitting a two-month high and peaking at $14,115 during the session. This rally was primarily driven by expectations of U.S. import tariffs, tightening global inventories, and positive diplomatic developments in the Middle East.

Copper prices remained firm in Asian trading on Wednesday, as markets closely watched President Trump's decision on refined copper import tariffs. With COMEX prices trading at a premium to LME, traders are rushing to ship metal into the U.S. ahead of potential tariff implementation.

According to IHS Markit shipping data, over 200,000 tons of copper arrived at U.S. ports in July, the largest single-month import volume since 2014. This surge has led to a sharp increase in U.S. warehouse inventories, while simultaneously reducing supply availability elsewhere. Year-to-date, COMEX copper prices have risen over 17%.

In stark contrast to ample U.S. stocks, LME inventories have fallen to a five-month low, with available stocks at just around 94,200 tons—equivalent to about one day of global consumption. The market is also showing a severe 'cash premium' structure, with spot contracts trading $105 per ton above three-month futures, indicating extreme short-term supply tightness. Chinese processors' 'buy-as-needed' strategy this year has further suppressed global inventory levels.

On the macro front, positive signals from Middle East diplomacy have boosted demand for risk assets. Trump stated that talks with Iran are progressing smoothly, raising market expectations of the reopening of the Strait of Hormuz. This has not only eased inflation concerns but also prompted traders to reassess the Federal Reserve's interest rate path.

Amid a weaker dollar, base metals including zinc, aluminum, and nickel have also rallied collectively. Zinc prices, in particular, have reached their highest level in nearly four years.

FACT BOX

  • Source: PR Times
  • Category: News