Copper prices have surged recently, reaching record levels amid a combination of macroeconomic factors, trade policy uncertainty, and supply concerns. On July 8, 2025, Comex copper futures spiked as much as 17% following U.S.
President Donald Trump's announcement of a planned 50% tariff on copper imports, creating significant market disruption and a 25% price premium in New York over London benchmarks This marks the most dramatic one-day surge in copper futures history, reflecting the potential impact of trade policy on global supply chains
The broader rally predates the tariff announcement, with LME copper hitting $10,000/mt in early July and settling at $9,943/mt, up 12.4% year-over-year SHFE copper in China also rose to 80,390 yuan/mt, showing a 14.2% year-over-year increase These gains have been supported by a weakening U.S. dollar, which fell to 98.6 on the dollar index, a 4.8% decline year-over-year
The inverse relationship between the dollar and copper prices has been particularly strong, with correlation coefficients exceeding -0.85 Additional factors contributing to the price surge include:
Supply: Global refined copper markets flipped to a 50,000 metric ton deficit in April, and LME copper stocks have dropped 80% year-to-date, hitting their lowest levels in nearly two years
Chinese demand: Despite a dip in May imports, Chinese smelters continue to show strong appetite for copper concentrate, with year-to-date imports up 7.4%
Market speculation: Open interest in copper futures rose by 5.78%, indicating fresh buying interest and technical strength in the market The situation remains fluid, with the July 9 tariff deadline serving as a key inflection point for market direction
While some analysts question the sustainability of the rally given limited physical demand, the confluence of dollar weakness, trade policy uncertainty, and tightening supply continues to support elevated prices.
DYOR, copper is a long term buy for me
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