Bitunix Analyst: Tariffs Reshape Copper Flows, Russia-Ukraine and Middle East Risks Jointly Drive Up Global Supply Costs
BlockBeats News, September 8 - LME three-month copper briefly rose to $14,533 per tonne, hitting a record high, up 17% this year and 47% over the past 12 months. But the core of this rally is not entirely demand explosion; rather, US tariff expectations are reshuffling global copper supply. Traders, leveraging the high premium of COMEX over LME, have shipped large volumes of copper to the US, leading to concentrated inventories, declining LME deliverable stocks, and tightening short-term supply in other regions.
This "supply mismatch" is reshaping copper pricing logic. US copper imports exceeded 220,000 tonnes for the first time in July, including 53,290 tonnes of cathode copper from the Democratic Republic of Congo, signaling that the market is adjusting logistics ahead of potential tariff implementation. Although global copper inventory levels remain relatively high, inventory transfers have created regional tightness, with LME cash copper maintaining a premium over three-month futures, reflecting reduced availability of nearby metal. In other words, current copper prices reflect not just how much copper the world needs, but where the copper is and whether it can flow freely in the future.
Long-term supply constraints further amplify this short-term mismatch. Aging major copper mines and difficulties in expanding production create structural tensions with copper demand from data centers, power grids, and renewable energy construction. While the US absorbs spot supply ahead of time, the Russia-Ukraine and Middle East situations add uncertainty to energy, transportation, and supply chains from different directions. On Russia-Ukraine, Washington is exploring diplomatic restart and winter de-escalation arrangements from September to October; if talks make progress, energy and transportation risk premiums could decline. However, battlefield and energy facility risks have not been fully resolved, and supply chains still face potential disruptions.
In the Middle East, Iran and Oman are discussing temporary security arrangements for the Strait of Hormuz, but actual shipping volumes remain significantly below pre-war levels, and Gulf energy facilities continue to face attack risks. This means that even with improved local diplomatic signals, global energy and raw material supplies remain under heightened uncertainty. When metal, energy, and transportation costs are simultaneously affected by geopolitical factors, companies face not just rising raw material prices, but also supply chain reconfiguration and increased capital expenditure costs.
Therefore, what truly deserves attention recently is not whether copper prices are simply "overheated," but how tariffs, Russia-Ukraine, the Middle East, and mine supply constraints are jointly transforming the operational dynamics of global commodity markets. In the past, globalized supply chains prioritized lowest cost and maximum efficiency; now, companies are placing greater emphasis on supply security and regional inventories. This will make commodity prices more prone to regional premiums and may sustain inflationary stickiness and manufacturing cost pressures. Copper's record high reflects not just the metals market itself, but a global resource allocation shift from "efficiency first" to "security first."
