Tariff Arbitrage Triggers Copper Short Squeeze Amid Bullish Positioning
Copper prices surged on Tuesday as tariff arbitrage triggered a short squeeze in London Metal Exchange (LME) copper, pushing prices up 0.8% to $14,494/mt. This move was driven by bullish positioning and reflected in the increased open interest of 266,000 lots, up 242 lots from the previous trading day.
On the Shanghai Futures Exchange (SHFE), the most-traded copper 2610 contract opened at 109,540 yuan/mt, initially hitting a low of 109,320 yuan/mt before climbing to a high of 110,240 yuan/mt and finally closing at 109,890 yuan/mt, up 0.62%. Trading volume reached 41,700 lots, and open interest stood at 223,000 lots, up 8,468 lots from the previous trading day.
The People's Bank of China reported a rise in gold reserves to 76.73 million ounces as of end-August 2026, marking the 22nd consecutive month of increases. This trend indicates further acceleration in gold purchases and sustained high-level buying.