Global copper prices are maintaining strong upward momentum, underpinned by shrinking exchange inventories and steady physical metal flows into the United States. Analysts Warren Patterson and Ewa Manthey at ING pointed out that recent warehouse withdrawal patterns on the London Metal Exchange (LME) highlight underlying supply tightness. Although recent metal deliveries into LME facilities had temporarily eased inventory pressures, the latest data suggests that any recovery in exchange stocks may be short-lived. Simultaneously, broader global markets are processing key developments across foreign exchange, cryptocurrency assets, and sovereign debt operations.
LME Inventory Squeeze and US Import Premium Dynamics
Exchange inventory movements remain a central focus for metals traders as global stocks stay at historically low levels. Cancelled warrants on the LME, which represent metal earmarked for delivery and removal from registered warehouses, jumped by 51.4 kilotonnes. This marks the largest single-day increase in cancelled warrants observed since May, signalling renewed physical drawdowns.
Elevated regional premiums in the United States continue to pull copper shipments across the Atlantic, reinforcing tight market conditions. Copper has gained nearly 15% year-to-date, reflecting robust investor demand and supply constraints. However, these record price levels are beginning to raise consumption concerns among physical end-users in China, creating a tug-of-war between supply-side tightness and demand elasticity. Analysts warn that persistent US inflows and low exchange inventories leave the copper market vulnerable to sharp price swings.
Foreign Exchange Trends: GBP/USD Consolidation and EUR/USD Support
In currency markets, the GBP/USD pair traded sideways for a second consecutive session, hovering around the 1.3630 region during Asian trading hours. The US Dollar attempted to extend a modest recovery from its lowest level recorded since May 14, acting as a temporary headwind for the currency pair. Nevertheless, the lack of aggressive follow-through selling has kept bearish traders cautious.
Meanwhile, EUR/USD experienced mild upside traction, trading near 1.1670 in Asian hours. The European currency gained support as rising crude oil prices, elevated sovereign bond yields, and heightened Middle East geopolitical tensions stoked Eurozone inflation expectations. These macroeconomic factors have amplified expectations for a hawkish stance from the European Central Bank (ECB), which is widely expected to enact a 25 basis point interest rate hike at its September meeting.
Cryptocurrency Surge and US Treasury Intervention
In digital asset markets, Bitcoin extended its rally above the $80,000 threshold, driven by sustained risk-on appetite across global financial markets. Among altcoins, Aerodrome Finance (AERO) and Virtuals Protocol (VIRTUAL) led daily gains over the past 24-hour cycle.
Concurrently, the US Treasury Department unveiled an adjusted schedule for liquidity operations. At 12:32 GMT on Wednesday, the department announced it would at least double the size of its liquidity support buyback operations for debt securities in the 10-to-20 year and 20-to-30 year maturity sectors. The maximum purchase limit will increase from $2 billion per operation to at least $4 billion, effective from September 9 through November 4, aiming to alleviate pressure in long-dated bond markets.
