Core Viewpoint - The copper market has shifted from a "premium frenzy" to a "sell-off for safety" as traders exit their long positions in response to unexpected tariff policies from the U.S. government [1][3]. Tariff Policy Impact - The U.S. announced a 50% tariff on imported semi-finished copper products starting August 1, while exempting refined cathode copper and scrap copper [3][4]. - This targeted approach contrasts sharply with previous expectations of a blanket tariff on all copper products, leading to a rapid liquidation of accumulated inventories in the U.S. [4][5]. Market Reactions - COMEX copper futures plummeted to $4.33 per pound, a drop of 21% from the previous close [2]. - The London and Shanghai copper markets also experienced declines of 0.8% and 1.3%, respectively, indicating a widespread market reaction [3]. Inventory Dynamics - As of July 30, COMEX copper inventory reached 250,000 tons, a significant increase from less than 100,000 tons in February [9]. - The London Metal Exchange (LME) saw a sharp decline in copper inventory, dropping over 64% from mid-February to early July [9]. Future Supply Chain Adjustments - The tariff policy is expected to disrupt global copper supply chains, potentially leading to a shift in sourcing strategies for industries reliant on copper, such as automotive and renewable energy [11]. - Major copper-exporting countries like Chile may redirect their supplies to Asian and European markets, further affecting global supply-demand balance [11]. Price Forecasts - Analysts predict that the influx of copper into the U.S. could lead to downward pressure on prices, with potential re-exports of the accumulated inventory back to international markets [10]. - The anticipated increase in U.S. copper imports for the year is projected to reach 1.36 million tons, significantly higher than the previous year's 900,000 tons [10]. Market Volatility - The copper market is experiencing high volatility, with the Shanghai bonded zone's copper price dropping to 69,768 yuan per ton, a decrease of 893 yuan [12]. - Companies are advised to closely monitor price differentials between COMEX, LME, and Shanghai copper to manage risks effectively [12].