๐๐จ๐ฉ๐ฉ๐๐ซ: ๐๐๐ซ๐ข๐๐๐ฌ, ๐๐ซ๐๐ง๐ ๐๐ข๐ ๐ง๐๐ฅ๐ฌ & ๐๐๐ฎ๐ญ๐ข๐จ๐ง ๐๐ซ๐จ๐ฎ๐ง๐ ๐๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ข๐ง๐
Hot Metal, Cold Feet?
Trumpโs proposed ๐๐% ๐ญ๐๐ซ๐ข๐๐ ๐จ๐ง ๐๐จ๐ฉ๐ฉ๐๐ซ ๐ข๐ฆ๐ฉ๐จ๐ซ๐ญ๐ฌ sent U.S. COMEX copper futures soaring to record highs yesterdayโwhile ๐๐๐ ๐๐ง๐ ๐๐ก๐๐ง๐ ๐ก๐๐ข ๐ฉ๐ซ๐ข๐๐๐ฌ ๐๐๐ญ๐ฎ๐๐ฅ๐ฅ๐ฒ ๐๐๐ฅ๐ฅ, highlighting how local policy shocks can create major distortions in a globally traded commodity.
๐๐จ, ๐ฐ๐ก๐ฒ ๐ญ๐ก๐ ๐๐ข๐ฏ๐๐ซ๐ ๐๐ง๐๐?
The tariffs directly target U.S. imports, driving a scramble for COMEX contracts as traders price in potential future supply constraintsโeven though COMEX warehouse inventories are currently high, suggesting no immediate physical shortage.
Meanwhile, global markets (LME, SHFE) still reflect softer physical demand, especially from China and Europe, where manufacturing activity has slowed.
Add to that a surge in speculative buying on COMEX, particularly from trend followers and CTAs reacting to price momentum.
Arbitrage between markets usually narrows these gaps, but tariffs and policy uncertainty make that harder in the short term.
Yet beneath the headlines, the long-term copper story hasnโt changed much: electrification, renewable energy buildout, and infrastructure upgrades continue to drive structural demand. But itโs been anything but a smooth ride.
๐๐ก๐๐ญ ๐๐๐จ๐ฎ๐ญ ๐๐จ๐ฌ๐ข๐ญ๐ข๐จ๐ง๐ข๐ง๐ ?
Interestingly, some reports point to CTA positioning shifting sharply more bullish, based on the COT Index now exceeding speculative thresholds. Itโs tempting to see this as confirmation of the trend, but worth adding a few caveats:
The COT Index in its simple form covers only U.S. futures (COMEX), and excludes optionsโwhich may hide hedges or other directional bets.
Global flows (LME, SHFE) tell a different story, with prices falling and positioning possibly lighter.
And the COT data doesnโt differentiate between true trend-following exposure and shorter-term speculative or spread trades.
Still, these shifts matter. Quick changes in positioning often reflect market participants re-evaluating risk/reward, whether based on fundamentals like tariffs or simply following price action.
At Takahฤ Capitalยฎ, copper has been an fascinating market for usโboth in our long-term trend systems and in our spread strategies, where shifts across the futures curve offer additional signals beyond outright price moves. If you want to learn more about our funds, please reach out to Moritz Seibert or myself and visit takahe.capital.