At 23:50 Beijing time on Tuesday night, New York Copper was short in US trading, and New York copper futures soared 5% in intraday trading.8tigersmegawaysCopper prices for July delivery by .5 per cent Jol Comex jumped to an intraday high of $5.026 a pound, within walking distance of the all-time high of $5.0395 set in the early stages of the conflict between Russia and Ukraine in March 2022.

The bearish market took place in the Comex contract in July. The contract, the most liquid of New York Copper, trades at a significant premium to benchmark contracts in other markets as a result of emptying. The price of $5.026 a pound is equivalent to $11080 a tonne, more than $1000 a tonne higher than the London Metal Exchange (LME) benchmark Lun copper contract.

On Tuesday, copper for LME delivery closed down $72 at $10114 a tonne. Lun copper fell 1.2% in continuous trading. Shanghai copper closed down 0.94%.

The surge in New York Copper in July also contributed to an unprecedented futures discount in the Comex market: the July contract was 29.25 cents higher per pound than the September contract.

Traders said that today's New York Copper was forced into the air like never before, allowing copper cargo ships to be transferred to the United States.

As for the short selling of the July New York copper contract, industry insiders pointed out that traders who shorted the copper futures spread or directly shorted the July New York copper futures contract faced heavy losses and were forced to cover their positions. Traders with long positions in copper in July are expected to take profits or extend to future contracts to take advantage of huge futures discounts.

It is important to note that the pressure on the July contract of New York Copper on Tuesday did not last very long, and the increase in the contract has narrowed significantly since then, rising 2.5% on the day to the front line of $4.886 as of press time.

On Tuesday, the Chilean government raised its copper price forecast to $4.2 a pound in 2024, compared with a previous estimate of $3.84.

The reason for the emergence of New York copper is that the supply and demand of copper is tight. On the one hand, the supply side is frequently disturbed, causing concerns about the shortage of copper supply.8tigersmegawaysOn the other hand, the global manufacturing recovery and energy transformation have boosted demand for copper. As one of the most important basic metals, copper is widely used in electric vehicles, power grids and other renewable energy fields. In addition, the construction and development costs of major mines are also increasing. Existing copper production will decline sharply in the coming years, and the agency estimates that miners will need to invest more than $150 billion between 2025 and 2032 to expand their capital spending on copper mines to meet the industry's supply demand.

Copper prices have continued to rise this year. In late April, the price of copper for LME futures exceeded $10, 000 a tonne for the first time since 2022. As the gap between supply and demand in the industry continues to widen, the market is generally expected to continue to push up copper prices.

In its report, Goldman Sachs raised its forecast for copper at the end of the year to $12000 a tonne from $10, 000 a tonne, and its annual average price to $9800 from $9200 a tonne, maintaining its 2025 average forecast of $15000 a tonne. Goldman Sachs estimates that long-term average prices need to remain between $12000 and $13000 a tonne to encourage long-term mine investment; to solve the short-term scarcity of copper, it is expected to reach at least $15000 a tonne next year.

In fact, in the United States, the soaring copper price has been felt by the general public: someone in San Francisco has cut the charging cable of Tesla's electric car and sold the copper wire inside as non-ferrous metal.

Other netizens noticed the high correlation between copper prices and Russell 2000, the benchmark stock index for small-cap US stocks:

Why do copper prices need to be paid close attention to? Copper is also known as "Dr. Copper" because of its importance in industrial production and its sensitivity to macro-economy. Copper is widely used in electrical, light industry, machinery manufacturing, construction industry, national defense industry and other fields, its demand is seen as a direct reflection of the economic activities of various countries, once the real economy has ups and downs, copper prices are easily affected-because it can predict the economic trend more accurately than academics with doctorates, and its price reflects the current economic trend more intuitively than many economic data.

Risk reminder and exemption clause

There are risks in the market, so you need to be careful when investing. This article does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any comments, opinions or conclusions in this article are in line with their specific circumstances. If you invest accordingly, you will be held responsible.