US Copper back to Parity with LME

COPPER

Copper futures are lower after data showed that stocks had risen on the LME. Trading conditions continue to settle after the White House’s move last week to exclude most copper products from tariffs, only applying tariffs to semi-finished products like wires and pipes, exempting key imports such as ore, cathodes, and concentrates, which make up the bulk of copper inflows. The move pushed US copper prices back to parity with the LME benchmark.

Traders will shift attention to the huge volume of copper that has been shipped to the US in anticipation of all encompassing tariffs. Spreads between prices in London, New York, and Shanghai are likely to determine the direction of metal flows. On Monday, US copper futures on CME Group’s Comex were trading about 1.5%, or $130 a ton, above those on the LME, undercutting the immediate rationale for exports. Any price move outside of a $100-$200 spread between CME and LME copper will likely trigger metal flows.

Traders are also alert after a fatal mining collapse in Chile’s El Teniente mine, which accounts for over a quarter of Chilean miner Codelco’s output, sparked supply fears. It is unclear how long the stoppage will last or whether it will trigger any sort of changes to Codelco’s end-of-year forecasts. Codelco must produce four reports on the collapse, according to a government document seen by Reuters on Monday, before it can restart its underground operations there. Markets are also watching other mine developments, with the massive Kamoa-Kakula complex run by Ivanhoe Mines Ltd. in the Democratic Republic of Congo. Still, Ivanhoe executives on Friday delivered an upbeat assessment on prospects for returning that mine to previous output guidance.

Long-term gains in copper could also be limited over concerns of surpluses in the market. The global refined copper market showed a 97,000 metric ton surplus in May, compared with an 80,000 metric ton deficit in April. Further weighing on sentiment are signs of weakening global demand, with China’s Yangshan copper premium falling by half since its May peak.

SILVER

Silver futures are higher, breaking from gold as intensifying industrial demand, structural supply deficit, and increased investor attention remain supportive of prices. Demand, especially from the energy sectors, is not slowing down. The metal is crucial to the technology needed to meet rising global electricity demand, including solar power, electric vehicles, and electronics.

Solar demand alone accounted for 17% of last year’s total, a threefold increase over the 5.6% from a decade ago. Industry data shows that global mine supply has declined by 7% since 2016, contributing to the prolonged structural deficit. It is estimated that the cumulative shortfall during 2021-2025 is almost 800 million oz. Investor demand has also remained favorable for prices, the rise of silver exchange-traded products (ETPs) continues to impact silver demand significantly, as many silver ETPs are backed by actual silver stored in vaults, rendering it unavailable for industrial users. In the first half of 2025, global silver-backed ETPs experienced significant net inflows, reaching 95 million oz. According to the Silver Institute, since 2019, more than 1.1 billion oz. (market balance plus ETPs) have been drawn from “available mobile inventory.” Silver prices will continue to be primarily influenced by investor demand, as the decreased availability will make the metal more sensitive to demand changes.

The long-term outlook for silver remains positive, driven by its essential role in semiconductors, solar panels, and other clean-energy technologies, sectors that continue to attract substantial global investment. That demand has remained robust despite broad headwinds faced in the last few months as a result of tariffs. South Korea’s exports rebounded in June largely on brisk semiconductor shipments, indicating the importance of and demand for the technology, despite challenges from higher US tariffs weighing on global trade. Recent data highlights this trend: China significantly increased its wind and solar capacity in the first quarter of 2025, while solar power generation in Europe surged 30% year-over-year during the same period.

GOLD

Gold futures are lower as a stronger dollar pressured the metal, although losses from dollar strength should be limited with increased bets of a Fed rate cut limiting the dollar’s upside. San Francisco Fed President Mary Daly said Monday that the time for rate cuts is approaching, given mounting evidence of a cooling labor market and no signs of persistent tariff-driven inflation.

Employers added 73,000 jobs last month, below the 110,000 expected by economists, while May and June saw revisions that took out 258,000 jobs. Job growth in the past three months was the lowest since 2010, except during the peak months of the pandemic. The report also showed that hiring has been particularly weak in the sectors most sensitive to tariffs and the ups and downs of the economy. From April to July, payrolls fell in mining and logging, manufacturing, wholesale trade, and retail trade, while hiring has slowed significantly in leisure and hospitality. The weak data spurred markets to increase bets that the Fed will cut rates at its September meeting and beyond. Traders are now pricing in a 94.4% chance that the Federal Reserve will cut rates next month.

President Trump last week unveiled new tariff rates, ranging from 10% to 41%, on imports from dozens of countries, set to take effect on August 7, rekindling global trade tensions and offering support for gold.

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