Crazy Copper Prices

Since March 2025, global copper prices have shown a “rocket-like” rise, with overseas increases and volatility greater than China, and the price gap between different markets has also continued to widen. The settlement prices of the main contract of Shanghai copper, the March contract of London copper, and the main contract of US copper have increased by 11%, 12%, and 27% respectively this year. Among them, the settlement price of US copper on March 21 reached US$11,273/ton, which has refreshed the historical high of US$11,257/ton on May 21, 2024. On that day, the price difference between US copper and London copper widened to US$1,393/ton, and the premium of 12.4% set a historical high.
The return of the US PMI to the expansion range, the loose policies of many central banks, the recently released China’s “High-quality Development Plan for the Copper Industry”, and the macro environment such as the policy side’s continued efforts to stabilize growth and promote consumption, and geopolitical conflicts are all beneficial to copper prices, but the biggest booster of this round of increases is still the US tariff policy.
On the one hand, since Trump took office, the unilateral trade protectionism measures taken by the United States have caused market concerns about the prospects of US economic growth and inflation, causing the US dollar index to restart its downward channel from late February, which has supported copper prices. On the other hand, on February 25, 2025, Trump cited Section 232 of the Trade Expansion Act to launch a national security investigation on copper imports. At the same time, on March 4, Trump announced that he would impose a 25% tariff on imported copper, which caused US manufacturers and traders to worry about rising costs and supply chain chaos. Enterprises started stockpiling in advance, pushing up the global short-term copper price. The price gap between US copper and non-US copper continued to widen, driven by cross-market arbitrage, and the “copper rush” came into being, and global copper stocks shifted to the United States.
China’s social inventory of electrolytic copper fell to 336,500 tons, and the bonded area inventory increased from less than 50,000 tons at the end of February to 116,500 tons, with an accumulation rate of more than 134.4%. On the same day, LME copper futures inventories also fell from 270,000 tons on February 19 to 220,000 tons, and copper extraction from Asian LME warehouses soared to the highest level since 2017. It is expected that 100,000-150,000 tons of refined copper will arrive at US ports in the next few weeks. If all arrive in the same month, it may exceed the historical record in January 2022. Goldman Sachs expects that US copper imports may double in the next few months, and US copper inventories may surge to 400,000 tons in the third quarter, accounting for half of the global copper inventory. In the short term, inventory transfers and speculative sentiment will support prices before tariffs are implemented, but the increase may slow down under the high base. However, beware of the Fed’s sudden interest rate hike, which may cool copper prices.

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