Fu Peng: Pay attention to the potential shift in copper from stockpiling to bottleneck logic [Fu Peng Commentary]

Observing the world from the trading desk, Peng Fu comments on finance. This content was written on November 7, 2026.

During the current lull in US stocks and the American AI industry chain, apart from crude oil, the most noteworthy commodity is copper.

In recent years, China’s large-scale investments in real estate, infrastructure, and traditional manufacturing have constituted the traditional demand side for copper. However, this source of demand is unlikely to continue expanding in total volume, and therefore can no longer provide extra, highly elastic incremental demand for copper. Against this backdrop, the entire copper narrative is mainly driven by the construction of AI data center infrastructure in the United States: AI has increased electrification demand, thus raising copper’s demand curve on the margin.

This has been the mainstream market narrative of recent years—the bottleneck for hardware computing power lies in chip shortages and electricity shortages, and at the end of electricity, there is copper. In other words, if tech giants continue to invest in capital expenditures, hundreds of billions of dollars in computing power and power distribution investments will trigger extreme demand for copper in the US, where computing power is highly centralized.

Demand Expectations Coupled with Tariff Expectations: Global Copper Inventories Shift toCOMEX

Previously, global copper inventories were mainly distributed across the London Metal Exchange (LME), the Asia-Pacific market, the Shanghai Futures Exchange, as well as bonded stocks and some hidden inventories—and were rarely concentrated in the United States. But over the past two years, with the advent of the above-mentioned demand factors, there has been a massive migration of global copper inventories.

With the Trump administration’s rise to power, policy direction swung significantly to the right, and all kinds of tariff expectations soared. In July 2025, the US announced under Section 232 that starting August 1, 2025, semi-finished copper and copper-intensive derivatives would be subject to a 50% tariff, while refined copper would be temporarily exempt; at the same time, the US Department of Commerce recommended imposing universal phased tariffs on refined copper—15% starting in 2027, rising to 30% in 2028, with final implementation subject to the President’s decision based on the Department of Commerce’s market assessment.

The combination of demand expectations and tariff expectations opened up a huge arbitrage window: copper prices on the New York Mercantile Exchange (COMEX) have remained consistently above those of the LME, maintaining a hefty premium. With such a price difference, traders barely need to factor in shipping and storage costs—it’s always profitable, so they moved large volumes of copper from around the world to the US. Starting from early 2025, US copper imports soared, continuing at high volumes through 2025 and 2026. The underlying logic was a massive shift in inventory: copper that had originally been in Asia and inLME warehouses was collectively moved into the United States.

This phase can therefore be understood as the COMEX market leading the Asian and global markets upward together. At this stage, the key to watch is naturally the US. According to Commodity Futures Trading Commission (CFTC) position data, under the influence of these variables, speculative short positions in the COMEX copper market have basically exited—the demand is very strong and almost no one wants to go short. In the CFTC data, non-commercial positions (true speculators) are no longer shorting, while commercial long positions (actual users of copper) have increased significantly in buying. The structure of the market itself also reflects these expectations.