Core Viewpoint - The COMEX copper trading prices have largely detached from the supply-demand fundamentals and are now heavily influenced by speculative capital, leading to uncertainty about future price movements [1][6]. Group 1: Impact of Tariffs - On July 8, President Trump announced a 50% tariff on copper imports, causing the COMEX copper main contract to surge over 17%, marking the largest single-day increase in history [3][4]. - The price difference between COMEX and LME copper contracts exceeded $2,600 per ton, prompting many CTA funds to engage in arbitrage by buying LME copper while shorting COMEX copper [5][6]. Group 2: Market Dynamics - The influx of copper into the U.S. is expected to continue, with estimates suggesting over 500,000 tons have been redirected to the U.S. market, leading to a significant increase in U.S. copper inventories [6][13]. - As of June 30, LME copper inventories dropped to 90,625 tons, a decrease of two-thirds from the beginning of the year, while COMEX inventories rose to 211,209 tons, an increase of over 126% [11][12]. Group 3: Trading Strategies - Many traders are capitalizing on the widening price gap between COMEX and LME copper through arbitrage strategies, with some institutions entering the market to bet on further widening of this gap [14][15]. - The speculative atmosphere in the COMEX market has led to increased trading volumes, with a 30% rise in call options on COMEX copper, indicating a strong bullish sentiment among investors [17]. Group 4: Global Supply Chain Effects - The U.S. tariff policy has created a "siphoning effect," drawing global copper supplies towards the U.S. and tightening inventories in non-U.S. regions, which may lead to increased processing fees for copper smelters [22][23]. - The processing fee for copper concentrate has turned negative, resulting in significant losses for smelting companies, although high sulfuric acid prices are helping to offset these losses [24]. Group 5: Domestic Market Reactions - Domestic copper prices in China have not followed the surge in COMEX prices, as they remain closely aligned with LME prices, which are seen as more reflective of global supply-demand dynamics [25]. - Analysts suggest that the final implementation of the 50% tariff will create significant volatility in overseas copper prices, which could lead to increased uncertainty in domestic copper pricing [26].