Andy Home of Reuters explains how copper markets are being squeezed by declining investor confidence in AI demand, strong Chinese buying, and uncertainty over potential U.S. import tariffs.
Western funds are reducing copper holdings following the AI stock selloff, with net long positions falling from 82,649 contracts in September to 34,444. Meanwhile, Chinese copper inventories have dropped to a three-year low, while import premiums reached a record $230 per ton.
Expectations of U.S. tariffs previously redirected large copper supplies to the United States, tightening availability elsewhere. However, as tariff expectations ease, the price gap between U.S. and London copper has narrowed from over $700 per ton in August to around $80.
Shifting investor sentiment and U.S. trade uncertainty are reshaping global copper flows, with China’s ability to attract supplies from U.S. warehouses likely to influence market direction.
