Traders' large-scale deliveries alleviate historic short squeezes, and copper prices continue to decline.

After traders made large-scale deliveries of copper to the London Metal Exchange (LME), easing one of the largest short squeezes in copper market history, copper prices continued their decline on Wednesday. As of the time of writing, LME copper futures fell by 0.21%, trading at $13,962.95 per ton. The previous day, copper prices dropped by 1.2%, marking the largest single-day decline since July 23. It is reported that LME's inventory of copper available for immediate delivery increased by more than 20,000 tons on Tuesday, the largest increase since April. A significant portion of this was contributed by Trafigura, while other traders were also arranging to ship copper into LME warehouses. Sources indicate that more copper is expected to be registered and receive warrants at the LME in the coming days. This development has eased some of the short squeeze pressure facing the copper market. Previously, due to traders positioning for the potential announcement of refined copper import tariffs by the Trump administration, a large amount of copper resources flowed to the United States, leading to the depletion of copper inventories in other regions globally. According to shipping data compiled by IHS Markit, approximately 56,000 tons of copper arrived in the United States during the first two weeks of August. Excluding the record 223,000 tons imported in July, the August import volume is essentially consistent with the monthly average levels of the past year or so. It is worth noting that although the June 30 deadline for submitting tariff recommendations by U.S. Secretary of Commerce Gina Raimondo has passed, the White House has yet to announce a final policy. Producers, consumer enterprises, and traders are closely monitoring whether Trump will expand the current trade protection measures targeting semi-finished copper products to include raw materials such as refined copper. Another sign that supply tightness is easing is the narrowing of the spread between spot copper and three-month copper futures, which fell to $248 per ton on Tuesday, down from a high of $545 per ton on Monday. Another key daily price spreadTom/next (representing the cost of rolling a position forward by one day)has also retreated, having previously surged to levels not seen since a major short squeeze in 2021.