The Commodity Compass Analytics team at Societe Generale, led by Michael Haigh and Jeremy Sellem, points out that copper has faced a dramatic shift driven by artificial intelligence demand, arbitrage flows, and US trade policy since February 2025. They explain that limited mine capacity, intense competition for concentrates, and surging investments in AI, data centers, electrical grids, and electric vehicles have tightened the physical market, making traditional analytical frameworks increasingly inadequate.
Supply Constraints And Surging Modern Demand
The global copper sector continues to grapple with a persistent lack of new mine capacity and fierce competition for raw materials. On the demand side, accelerating global investments in artificial intelligence infrastructure, expansive data centers, power grid upgrades, and rising electric vehicle sales have reinforced long-term consumption expectations. This dynamic interaction between traditional fundamentals and modern geographic forces has fundamentally altered how physical availability and market returns are evaluated globally.
Trade Policies And Arbitrage Flows
Market dynamics since February 2025 reflect a powerful blend of trade policy and cross-border arbitrage. Tariff-related arbitrage has redirected massive volumes of copper inventories straight toward the United States, which in turn has severely restricted physical availability in other regions. Concurrently, foreign exchange markets see major currencies navigating tight ranges at the start of the week, with the British Pound flirting near the 1.3650 zone and the Euro hovering around the 1.1670 region amid fluctuating US Dollar movements.
Precious Metals And US Treasury Liquidity Actions
Amid broader macroeconomic shifts, gold maintains a strong bullish momentum, approaching the 4,700 dollar threshold per troy ounce for the first time since early May despite a resilient US Dollar and modest pullbacks in Treasury yields. In policy actions, the US Treasury announced on Wednesday that it would double the size of its liquidity support buyback operations across the 10-year to 30-year sectors. The maximum limit per operation moves from 2 billion dollars to at least 4 billion dollars, taking effect from September 9 and running through November 4.
