The price of electrolytic copper is 'soaring'... It has exceeded $10,000 per ton for four consecutive trading days.

The CME-SHFE-LME arbitrage window has opened, causing continuous price increases.

The U.S. CPI came in lower than expected, raising hopes for a rate cut.

Cochilco has significantly raised its price forecast for this year.

The price of electrolytic copper continues to rise. The opening of the arbitrage window between the New York CME, the Shanghai Futures Exchange (SHFE) in China, and the London Metal Exchange (LME) has caused a short squeeze on the CME, leading to sustained price increases. Additionally, the U.S. Consumer Price Index (CPI) came in lower than market expectations, strengthening expectations for a rate cut and supporting the rise in copper prices.

On the 16th, the spot price of electrolytic copper traded on the LME rose by $87 to $10,308 per ton, and the three-month price increased by $100 to $10,400 per ton.

The U.S. CPI for April, announced a day earlier, rose by 0.3% from the previous month. This was below the market forecast and the 0.4% increase in March. On a year-over-year basis, it increased by 3.4%, also lower than the 3.5% rise in March. This has heightened expectations for a rate cut by the Federal Reserve.

Additionally, despite a slight increase in major exchange inventories, levels remain low, exacerbating supply shortage concerns. The LME's available inventory of electrolytic copper remains around 90,000 tons.

CME copper prices are testing historic highs, with institutions holding short positions expected to either deliver physical copper or roll over their positions, leading to additional buying pressure.

According to NH Futures, Trafigura and IXM, major holders of copper positions on the CME, are currently facing a short squeeze. They have two options to resolve this: purchasing physical copper in the spot market for delivery or rolling over their short positions. CME copper prices have risen by 28% this year.

The deteriorating relationship between the largest consumer countries, China and the United States, is expected to act as a downside risk. The U.S. has significantly increased tariffs on major Chinese products, heightening economic tensions between the two countries.

Meanwhile, the Chilean state copper company Cochilco has significantly raised its average copper price forecast for 2024 to $4.30 per pound (approximately $9,480 per ton). The previous forecast was $3.85 per pound (approximately $8,488 per ton).