Copper Breaks All-Time High as Global Economy Shifts to Physical Realities

The global economy is shifting from speculative macro to physical realities, driven by supply chains, weather disruptions, and critical metal deficits.

Copper hit new all-time highs last week due to industrial demand and supply tightness, while gold lags before potentially catching up. Tavi Costa notes that copper's breakout re-prices the entire commodity complex, with gold eventually following once currency debasement and monetary realities collide with physical costs.

The fertiliser industry is facing a phosphate supply squeeze due to sulphur disruptions, including the closure of the Strait of Hormuz and a blockade in Kazakhstan. Mosaic has curtailed production to limit exposure to expensive raw materials, estimating global phosphate production could fall short by up to 30 million tonnes if constraints persist.

The US EXIM Bank is pouring capital into critical mineral projects, including graphite and rare earths, while governments are increasingly acting as senior lenders to secure ex-China supply chains. However, institutional capital remains cautious, waiting for these dollars to transform into active production.