London and New York copper both hit record highs! Tariff expectations and supply shortages drive the rally.

Copper prices hit record highs in both London and New York markets, becoming the most watched focus in the current commodities market.

The anticipated tariffs have led to a continued outflow of metals, compressing physical supply in markets outside the US. This, coupled with a long-standing supply-demand imbalance, has fueled this price surge. Meanwhile, escalating tensions in the Middle East and concerns about inflation have added uncertainty to the copper price outlook.

The benchmark three-month copper contract on the London Metal Exchange reached a high of $14,858.50 per tonne, surpassing the previous trading day's peak of $14,779.00, marking the third consecutive trading day of record highs. Copper futures on the New York Mercantile Exchange also climbed to a new all-time high of $6.894 per pound.

The direct trigger for this round of price increases was the market's continued expectation of the Trump administration imposing tariffs on refined copper imports, which led to a large amount of metal being shipped to the United States, resulting in a significant tightening of physical supply in the London market.

It is worth noting that the US attack on Iranian oil tankers caused Brent crude oil prices to break through $100 per barrel, which intensified market concerns about the inflation outlook and the direction of the Federal Reserve's policy, putting downward pressure on copper prices.

Tariff expectations distort metal flows, putting pressure on supply in the London market.

One of the core driving factors behind this round of sharp copper price increases is the impact of large-scale metal flow shifts on the physical market of the London Metal Exchange.

As the market anticipated that the Trump administration would impose tariffs on refined copper imports, traders rushed to ship hundreds of thousands of tons of copper to the United States for stockpiling, resulting in a significant tightening of physical supply outside the United States and a supply shortage in the London market.

It is understood that the U.S. Department of Commerce was originally scheduled to submit a report to the White House by the end of June, making recommendations on whether it was necessary to impose relevant tariffs, but has failed to complete it by the deadline. The delay in the report has not eased market expectations of tariffs; on the contrary, this uncertainty has continued to dominate traders' behavior, driving continued stockpiling activities.

Looking at a longer timeframe, copper prices have risen by 19% year-to-date, reflecting the market's continued pricing in of a long-term supply-demand imbalance. The structural contradiction—that output growth from aging mines cannot keep pace with consumption growth driven by data centers, renewable energy, and grid expansion—is seen by copper bulls as the core logic supporting the price rally.

Escalating conflict in the Middle East casts a shadow over inflation expectations and hinders growth.

Just as copper prices hit new highs, the latest deterioration in the Middle East situation has brought new macroeconomic variables to the market.

The United States announced attacks on Iranian oil tankers in response to an attack on its warships by the Iranian Islamic Revolutionary Guard Corps. Brent crude oil immediately broke through $100 a barrel, with market concerns about inflation clearly rising ahead of Friday's release of US consumer price data.

The surge in energy prices has further complicated copper price movements. Guangzhou Futures posted on social media, "A cautious approach is still needed at the macro level. Uncertainty remains regarding the trajectory of US inflation, and changes in Federal Reserve policy expectations could put downward pressure on copper prices."

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