Macro factors are positive.
On July 30th, the US President signed a notice, stating that starting from August 1st, a 50% tariff will be uniformly imposed on imported semi-finished copper products (such as copper pipes, copper wires, copper rods, copper plates, etc.) and copper-intensive derivative products (such as pipe fittings, cables, connectors, electrical components, etc.). As soon as this news was released, the copper price in New York dropped by more than 18% on the same day, and the price difference between COMEX copper and LME copper quickly narrowed to the level before the tariff expectation.
It is worth noting that raw materials such as copper ore and cathode copper have been exempted from tariffs, which exceeded market expectations. Previously, the market expected that copper production in the US might increase, while the demand for copper from non-US regions might decrease. However, after the tariff exemption for copper mines and electrolytic copper, this expectation was significantly weakened. From the perspective of global supply and demand, this exemption has been positive for copper prices. However, after the convergence of the COMEX copper and LME copper price differences, it is expected that the US copper import volume may significantly decrease in the second half of the year, while the supply of copper from non-US regions may increase, thereby forming a bearish impact on LME copper and Shanghai copper.
Currently, the global market has a high risk appetite, and both domestic and foreign equity markets have performed well, which is positive for copper prices. At the beginning of this month, the US non-farm data was unexpectedly weak, the non-manufacturing PMI was lower than expected, and the market's expectation of a weakening US economy increased, which also pushed up the expectation of a Fed rate cut. As a result, the US dollar index declined. Currently, the market expects that the Fed may cut interest rates three times within this year, with a cumulative reduction of 75 basis points.
In the future, it is necessary to be vigilant of the risk of a shift in the macro situation. If the US economy continues to weaken, the market may switch to a recession trading mode, and then copper prices will be under pressure to decline; conversely, if the US economy does not further weaken and the Fed implements a rate cut, it will form a positive impact on copper prices. The macro situation in China in July was positive.
Under the catalysis of the "anti-crowding" policy, domestic pricing varieties showed a general upward trend. In late July, supported by the macro situation, this strong operating pattern was continued. However, at the end of July, the bullish atmosphere in the market cooled down, and commodities entered an adjustment stage.
Currently, the spot industry is in the off-season, and its impact on copper prices is limited. However, under the support of the macro situation, the performance of the far-month contracts is significantly stronger than that of the near-month contracts. The domestic electrolytic copper inventory liquidation process has slowed down, while the copper inventory in overseas regions has continued to accumulate at a high level. Therefore, copper prices have shown an internal strength and external weakness pattern. Domestic upstream refineries maintain high production, and it is expected that the import volume of refined copper will increase as the import window opens and tariff disturbances weaken, and the domestic industrial sector faces a large supply pressure. It is necessary to continuously monitor the changes in domestic inventory.
With the US tariff policy excluding refined copper and copper ore, the LME copper and COMEX copper price difference has converged to the normal level of previous years, and the influence of the tariff policy on copper prices has significantly weakened. In August, the new round of US tariff policy was implemented, and the US and major global economies reached new trade agreements, or the current tariff policy may be extended for 90 days. As a result, global economic uncertainty has decreased, and it is expected that market risk appetite will remain at a high level, which will form a positive impact on copper prices.
Additionally, the joint statement of the Soderstrom economic talks between China and the US was officially released on August 12, 2025, which is the result of the third round of high-level economic consultations between China and the US after the Geneva and London talks. The core content of the statement revolves around extending the tariff for 90 days and adjusting non-tariff measures. The continuous improvement of the US trade relationship will also be positive for the copper price trend.
In summary, the current macro situation is positive for copper prices, while the industrial situation is neutral to bearish. It is expected that the overall copper price will continue to show an internal strength and external weakness, near weakness and far strength pattern.
(Source: Futures Daily)