On Friday, the main contract of copper in Shanghai finally showed a rebound after falling for five consecutive days. As of 10:45, the latest price was reported at 78,520 yuan per ton, with a slight increase of 0.17%. However, market sentiment was still torn by multiple contradictions. The "siphoning effect" of the US tariff policy and the "expectation gap" of the Fed's interest rate cut formed a rare resonance, and the global copper supply chain is undergoing a paradigm shift from "cost pricing" to "policy bargaining".
Data from the Changjiang Nonferrous Metals Network shows that the spot price of 1# copper in the Yangtze River region is reported at 78,810 yuan per ton, up by 110 yuan per ton compared to yesterday. The spot premium is reported as a premium of 110 yuan per ton, down by 20 yuan per ton compared to yesterday.
Tariff shockwave: The butterfly effect of global supply chains
The Trump administration announced that starting from August 1st, it would impose a 20%-30% tariff on seven countries. Coupled with the previous 50% tariff threat on key commodities such as copper and steel, the global copper trade flow is undergoing a reconfiguration. The output of the Chilean National Copper Corporation (Codelco) increased by 16.5% year-on-year to 130,100 tons in May, but the spot premium for exports to the North American market has soared to $1,200 per ton, forcing downstream enterprises to turn to African sources. This "forced detour" in the supply chain has pushed up hidden costs - the shipping cycle from Chile to China has been extended by 15 days, and logistics costs have increased by 22%, while European smelters, to avoid tariffs, began to purchase Russian copper concentrate, whose grade is 1.5 percentage points lower than the standard ore, resulting in an 8% increase in tonne copper energy consumption.
Interest rate cut expectations: The "see-saw effect" between the US dollar and copper prices
The statement made by San Francisco Federal Reserve President Daly that "interest rates will be cut twice this year" contrasts with the hawkish remarks of Fed Waller, who said "interest rate cuts might start in July". This policy uncertainty has given rise to special trading strategies in the copper market: The proportion of straddle options in the unexpired contracts of COMEX copper futures has risen to 38%, reflecting the market's double bets on "a copper price rebound after the interest rate cuts" and "inflation out of control and stagflation". It is notable that the rebound of the US dollar index to 97.58 did not significantly suppress the copper price. The LME copper inventory dropped to 237,000 tons (a decrease of 9.13% compared to the previous year), indicating that the contest between the financial and industrial attributes has entered a new stage.
