Copper Prices Soar Amidst US-China Resource Hegemony Tensions

Copper prices have been breaking record highs every day, reaching $14,437 per ton on the London Metal Exchange (LME), a 45% increase over the past year. Analysts attribute this surge to rising demand for copper due to the construction of artificial intelligence infrastructure, but experts say the reality is more complex.

The U.S.-China resource hegemony war and structural supply shortages are fueling the price hike. The U.S. government's investigation into imports of copper and derivatives under Section 232 of the Trade Expansion Act led to the designation of copper as a strategic key mineral, essential for national security and high-tech industries.

A 50% tariff on semi-finished copper products was imposed in August last year, prompting global raw material traders to stock up before regulations tightened. Demand exploded, with COMEX's copper inventories increasing from 1-2% of the world's supply two years ago to nearly 70%.

The aging of copper mines has also contributed to structural problems on the supply side. Extreme weather events and production decreases have made the market more sensitive to short-term issues, with most South American copper mines facing sharp declines in output.