In one of the biggest sources of concern for the global economy and markets, copper is evolving, as the price rally is now accompanied by clear indications of real closeness on the market, at a time when fears of imposing new tariffs that will increase inflationary shock.
The week passed it became known that the stocks in the London Metal Exchange (LME) were significantly reduced, while the premium of direct delivery copper against future delivery contracts was ejected to the highest level in the last five years. With the spot price touching $14,500, the battle for readily available copper turns into a new headache for industry, businesses and investors.
And that is because copper is at the heart of almost every major investment narrative of the time: from artificial intelligence and data centers to electrical networks, RES and electric drive.
An extended period of expensive copper can increase investment costs, compress corporate margins and gradually pass on prices paid by businesses and households.
For stock markets a new paradox is thus created: the same investment boom that feeds the expectations of growth and corporate profits strengthens demand for a critical metal whose supply is difficult to follow, threatening to revive inflationary pressures and complicate even more the decisions of central banks.
Copper shortages, in fact, forced Standard & Poor’s earlier in 2026 to warn of systemic risk to the economy and a large geostrategic focus of controversy more Here.
Customs duties
At the same time, the difference between copper prices in the US basic copper futures market, COMEX, and the LME metal market in London, functions as «risk indicator» about the duties that Donald Trump is expected to impose.
It is noted that LME is the world reference point for copper prices and is used as the basis for pricing both in primary and recycled copper contracts and in hedging transactions;
Under normal circumstances prices on these two markets are relatively close, while historically large differences are recorded when factors such as a crisis in Chinese demand or problems in production in Chilean mines dominate.
Today, fear of imposing new duties enters the equation and changes the data. According to Societe Generale, the current premium of American copper against LME, invoices a possibility of about 14.6% of a 15% duty being imposed in January 2027 and a 37% probability of a 30% duty being imposed in January 2028. Uncertainty has already caused rearrangement of global flows, with copper inputs to the US reaching a high of 12 years, as traders rush to carry metal into the American market pending White House decisions.
So the expectation that the United States might increase tariffs on imported copper can make metal much more expensive in COMEX than in LME and this creates an incentive for traders to buy natural copper out of the US and send it to the American market before duties are imposed. This leads us to the point where stocks are shrinking in London, the narrowness of the market increases and with it the risk of new inflationary pressures.
Economy
Copper is located everywhere: electrical networks, cables, transformers, cars, electric vehicles, buildings, air conditioners, household appliances, industrial equipment, photovoltaics, wind turbines, data centers and the list is really endless. It is reasonable, therefore, that the longer the metal price remains at historically high levels, the greater the likelihood that producers will begin to pass on the additional cost to their customers.
The impact on the consumer is gradually integrated into the price of hundreds of products and services. But there is also a less visible impact. Upgrading electrical networks requires huge amounts of copper. If the cost of these investments increases significantly, part of it can in the long term pass through regulated charges and tariffs to the final consumer.
Stocks and spreads
On 14 August the August contract at LME negotiated up to 370 dollars a ton more expensive than the September contract, which is the largest spread of a month since 2021. Traders are now willing to pay an important premium to ensure direct delivery of the metal, in an extreme form of backwarding and in an indication that the market is not only concerned about the future adequacy of the metal, but about how much copper is actually available here and now.
At the same time, LME's stocks have retreated dramatically, from around 401,000 tonnes in early May to about 215,000 tonnes, while over 50% of existing stocks have been committed to leaving the warehouses. The simultaneous decline in stocks combined with the ejecting of spread between contracts is a strong indication of real closeness in the physical market.
In Shanghai, stocks have collapsed from about 430,000 to 69,300 tonnes since March. On the contrary, COMEX stocks in the US have been launched to over 717,000 tonnes. This suggests that we also have a geographical distortion of supply.
Inflation
Here lies the greatest macroeconomic risk. A short-term growth of copper can hardly in itself dramatically change the Consumer Price Index. However, an extended period of very high prices will have tremendous consequences. This is because the cost of capital equipment, construction, energy infrastructure, etc. will be increased at a time when central banks are trying to avoid rising interest rates so as not to harm growth.
The paradox about markets
Το ράλι του χαλκού έχει επίσης δύο εντελώς διαφορετικές αναγνώσεις για τις χρηματιστηριακές αγορές. Από τη μία πλευρά αποτελεί εξαιρετική είδηση για τους μεγάλους παραγωγούς χαλκού. Η Antofagasta, για παράδειγμα, ανακοίνωσε αύξηση EBITDA κατά 27% στο πρώτο εξάμηνο, με τις υψηλότερες τιμές του μετάλλου να αντισταθμίζουν τη μειωμένη παραγωγή.
Από την άλλη, αυτό που αποτελεί κέρδος για τις εταιρείες εξόρυξης αποτελεί κόστος για σχεδόν όλους τους υπόλοιπους. Και κυρίως για τις εταιρείες που βρίσκονται στην καρδιά του σημερινού επενδυτικού αφηγήματος: AI, data centers, ηλεκτρικά δίκτυα, ενεργειακή μετάβαση και εξηλεκτρισμός. Εάν ο χαλκός, η ενέργεια και το κόστος χρηματοδότησης παραμείνουν ταυτόχρονα σε υψηλά επίπεδα, το κόστος των τεράστιων επενδυτικών προγραμμάτων αυξάνεται και οι προσδοκώμενες αποδόσεις τους περιορίζονται.
