Copper prices are moving higher on their own momentum, in sync with a strengthening stock market. Overnight, LME copper led gains, rising 2.84%. The market is supported by tight global supply and declining inventories in China, with new growth drivers emerging from areas like AI computing power. Spot copper is expected to surge significantly today.

In the copper futures market, the independent upward trend aligned with equity market strength. Overnight, LME copper showed robust performance, closing strongly with a large bullish candlestick. The latest closing price was $13,920 per tonne, up $384 or 2.84%. Trading volume decreased by 2,638 lots to 26,837 lots, while open interest increased by 1,201 lots to 271,989 lots. Evening trading on the SHFE saw copper open higher and strengthen, with the main contract breaking above the 106,000 yuan level. The latest closing price for the main June 2606 contract was 106,770 yuan per tonne, up 2,450 yuan or 2.35%.

LME copper inventories as of May 9 were 401,000 metric tons, an increase of 1,600 tons or 0.40% from the previous trading day.

The SHFE copper main June 2606 contract opened higher this morning. At 09:00, the latest opening price was reported at 106,990 yuan per tonne, up 2,670 yuan.

Macro sentiment has become less sensitive, with a tight supply-demand balance driving copper's price resilience. Overnight, SHFE copper's price center shifted significantly higher, reaching its highest level in over three weeks. Despite renewed setbacks in US-Iran negotiations and public criticism from former US officials, with dim prospects for navigation through the Strait of Hormuz, the market appears fatigued by such developments. Monday saw Asian stock markets and metal prices strengthen in tandem, indicating traders have limited concern about further escalation. Copper is carving out its own path, with the core driver shifting from geopolitical games to a fundamental logic of "rigid supply shortage + Chinese inventory drawdown."

On economic data, China's April CPI rose 1.2% year-on-year, while the PPI surged 2.8% year-on-year. The expansion in industrial product price increases signals a moderate recovery in domestic demand. Although uncertainty remains ahead of the release of US April CPI data, institutions like Citi and JPMorgan share the view that rigid demand from the energy transition and defense sectors, combined with supply disruptions, form a "moat" protecting copper prices from macro volatility. Even a prolonged closure of the Strait of Hormuz would firmly lock in a floor for copper prices.

Fundamentally, disruptions at the mine level have become normalized. Although Freeport clarified efforts to resume production at Indonesia's Grasberg, the world's second-largest copper mine, by the end of 2027, current capacity utilization is only 40%-50%, with substantial shortages expected to persist throughout the year. Operational challenges are frequent at mines like Chile's Quebrada Blanca, indicating a loss of global copper mine output flexibility.

There is a risk of a sulfur supply bottleneck. The blockade of the Strait of Hormuz due to Middle East conflicts has cut off about one-quarter of global sulfur supply. The sulfur shortage is pushing up sulfuric acid prices, directly impacting hydrometallurgical copper and leaching processes. This could theoretically affect up to about 8% of global mined copper supply, providing strong cost support at the smelting stage.

Supported by structural demand from AI computing infrastructure and the new energy transition, copper's unilateral uptrend is largely established. However, spot market acceptance of high prices (fear of highs) remains a key variable constraining a smooth rally.

Looking ahead, analysis suggests that while the unilateral uptrend in copper prices is largely established, caution is warranted against high-level volatility. It is expected that spot copper prices will follow futures in a significant rise today, with a core trading range seen at 105,000-108,500 yuan per tonne. Strategically, buying on dips is recommended, but close attention should be paid to liquidity feedback following the release of US CPI data tonight, avoiding blind chasing of the rally at absolute highs.