Core Viewpoint - The article highlights a significant rally in both precious and industrial metals, suggesting the potential onset of a long-term commodity bull market driven by geopolitical factors and a weaker dollar [1]. Group 1: Precious Metals - Gold and silver futures are currently dominating headlines amid geopolitical turmoil [1]. - The rally in precious metals is occurring alongside a notable weakness in the dollar [1]. Group 2: Industrial Metals - Industrial metals, including aluminum and steel, are experiencing strong performance, with companies like Alcoa (AA) and Nucor (NUE) showing significant price increases [2][3]. - Copper futures have reached new highs, drawing attention to mining companies such as Freeport McMoRan (FCX) [4]. Group 3: Market Dynamics - The article notes that high prices in commodities can lead to a self-correcting mechanism where either consumers absorb the price increases or demand decreases due to rising inflation [5]. - Investors interested in base and industrial metals are encouraged to consider mining stocks, ETFs, or futures, while being aware of the inherent risks and volatility associated with commodity speculation [5].

Core Viewpoint - The refined copper market is experiencing significant volatility due to potential U.S. tariffs, geopolitical tensions, and supply chain disruptions, leading to increased domestic prices and a surge in imports [1][2][5]. Group 1: Market Dynamics - U.S. copper imports reached their highest level since July, driven by the anticipation of tariffs and a premium on domestic prices [1]. - The Department of Commerce is conducting a market assessment, which may lead to formal decisions on refined metal duties, further distorting global trade flows [2]. - Copper prices have surged to record highs, exceeding $13,000 per ton in London and $6 per pound in New York, influenced by geopolitical risks and strong demand from sectors like renewable energy [6]. Group 2: Supply Chain Challenges - Structural tightness in the global copper market is evident, with declining inventories outside the U.S. and repeated supply disruptions contributing to expectations of persistent shortfalls [2]. - A series of operational setbacks and accidents in major producing regions have curtailed production growth, exacerbating supply constraints [9][10]. - Smelters are facing difficulties in securing sufficient concentrate, leading to record-low treatment and refining charges, indicating upstream supply constraints [11]. Group 3: Long-term Outlook - The International Energy Agency forecasts a potential copper supply shortfall of 30% by 2035, driven by declining ore grades and rising capital costs [12]. - Market concentration is increasing, with the top three refining nations controlling 86% of processing capacity for major energy minerals, raising concerns about the copper market's vulnerability to geopolitical shocks [13]. Group 4: Investment Strategies - Traders can gain exposure to copper prices through futures contracts, which offer high liquidity and responsiveness to market changes [14]. - Exchange-traded funds (ETFs) provide a diversified approach for investors, allowing them to track copper prices without the complexities of futures trading [15]. - Direct investment in copper-producing companies offers leveraged exposure to copper prices, with major players like Glencore and BHP being core holdings in this segment [16].

Core Insights - Copper futures are expected to potentially reach $5 per pound by the end of 2025, supported by strong supply-demand fundamentals [1] - As of September 16, 2025, COMEX copper futures were just below $4.70 per pound, with LME forwards trading at $10,126.50 per metric ton [2] - A long-term bullish trend in copper prices has been established, with significant price movements observed in 2025 [3][4] Price Trends - COMEX copper futures reached a record high of $5.9585 per pound in July 2025, maintaining a bullish trend despite volatility [4] - LME forwards also reached a record high in October 2025, indicating a strong upward trend in copper prices [5][6] Inventory Dynamics - Tariffs have caused a significant shift in copper inventories, with LME stocks dropping nearly 50% to 135,725 tons by November 14, 2025, while COMEX inventories surged by 309.3% to 381,296 metric tons [7] - The overall combined stocks increased by over 150,000 tons from the end of 2024 to November 14, 2025, highlighting a shift in market dynamics [7]

Core Insights - The article discusses the importance of two volatility metrics, skew ratio and convexity, in understanding market sentiment and uncertainty [4][6][13] - It emphasizes that while skew ratio indicates potential market direction, convexity is crucial for assessing the cost of risk in out-of-the-money options [3][5][13] Group 1: Euro Futures Market - In early March 2025, the Euro futures market experienced a rally, with the skew ratio increasing from 0.90 to 1.05, indicating a bullish sentiment [5] - The rise in convexity during this period reflected increased uncertainty due to the introduction of tariffs [5] - By April 2025, convexity rose again, suggesting that the market was anticipating an imminent move, supported by the skew ratio indicating a likely upside trend [5] Group 2: Wheat Prices and Geopolitical Conflicts - Wheat prices surged from approximately $7.50 to over $9 per bushel amid the ongoing Russia-Ukraine conflict in October 2022 [8] - The increase in the skew ratio during this period reflected a bullish sentiment among traders [8] - However, the concurrent rise in convexity indicated growing uncertainty about the market's direction, with traders seeking protection against potential price movements [8] Group 3: Copper Market Dynamics - In April 2025, discussions around proposed copper tariffs led to increased market protection seeking, reflected in a rising skew ratio for front-month copper futures [11] - The simultaneous increase in convexity suggested conflicting sentiments in the market, as participants anticipated potential price increases while also hedging against uncertainty [11]

Group 1 - Copper futures experienced extreme volatility in 2025, with record highs in March and July, and significant drops in April and late July, exacerbated by U.S. tariffs [1] - On July 31, 2025, COMEX copper futures were priced at $4.4255 per pound, while three-month LME copper forwards were at $9,793 per metric ton [2] - The continuous COMEX copper futures contract saw a 27.3% decline from a record high of $5.9585 on July 24 to a low of $4.3325 on July 31 [3] Group 2 - Since the July 31 low, copper prices have shown recovery, making higher lows and higher highs, with prices exceeding $4.55 on September 4 [4] - LME three-month copper forwards had a less volatile year compared to COMEX futures, with significant price differentials caused by tariffs [5] - Although COMEX futures reached new record highs in 2025, LME three-month forwards remained below the 2024 peak of $11,104.50 per metric ton, with a low of $8,105 per ton on April 7 due to tariff announcements [6]