Copper Price Surge Driven by Tariff Expectations, Mine Supply Tightness

Copper prices have reached record highs, but this phenomenon is not driven by a shortage of copper. Instead, data shows that global exchange inventories haven't vanished; they have simply become highly concentrated in the United States. The COMEX copper inventories now represent nearly 70% of total global exchange stocks, while physical spot markets outside the U.S. are tightening continuously.

The flow of copper has been artificially distorted by tariff expectations. What looks like a 'commodity bull market' on the surface is actually three intertwined forces: mine supply tightness + U.S. tariff-driven front-loading + new AI/power grid demand.

Despite U.S. domestic consumption being only 6%, 7% of the global total, its hoarded copper is estimated to exceed 1 million tons, enough to cover about seven months of demand. Tight physical supply, high backwardation in near-term contracts, and elevated canceled warrants outside the U.S. mean prices can only rise to attract remaining supply.

Traditional sectors like real estate and air conditioning are resisting high copper prices, but emerging sectors such as data centers, power grids, and NEVs are driving genuine incremental demand.