Core Viewpoint - The copper market is experiencing significant price increases, with COMEX copper prices rising over 25% since early April, nearing historical highs, which has positively impacted the A-share copper metal sector [1][2]. Group 1: Market Dynamics - There is a notable divergence in global copper market prices, with COMEX copper trading significantly higher than LME copper by $1,200, and LME copper prices exceeding Shanghai copper by nearly 2,000 yuan [3]. - The anticipation of tariffs on copper imports by the U.S. has led to increased preemptive stockpiling by downstream manufacturers and intensified arbitrage trading, disrupting the global copper market balance [4]. - LME copper inventories have drastically decreased, with Asian warehouse stocks plummeting from 200,000 tons to 60,000 tons, a reduction of 70%, while European stocks have also seen a significant decline of 44% [5][8]. Group 2: Supply and Demand Factors - The current supply situation is tight, with LME copper's available inventory down approximately 80% since the beginning of the year, equating to just one day's global usage [8]. - The persistent shortage of copper in the spot market has led to a significant premium for spot prices over futures, indicating supply constraints [9]. - The potential for a short squeeze in the LME copper market is a concern, although the likelihood remains low due to new regulations aimed at preventing such occurrences [10][11]. Group 3: Historical Context and Future Outlook - Historical instances of copper market squeezes, such as the 2021 event, have shaped current market dynamics, with lessons learned influencing regulatory changes [12][15]. - The long-term outlook for copper prices remains bullish, driven by limited supply growth and increasing demand from sectors like electric grid investments and the burgeoning electric vehicle market [16][17]. - Major Chinese copper mining companies, such as Zijin Mining and Luoyang Molybdenum, are expected to see significant production increases, contributing to a favorable supply-demand balance [18][19].