TD Securities’ Ryan McKay and Bart Melek note that Copper remains under pressure as the missed June 30 Section 232 tariff update removes a near-term supply risk and weakens short-term momentum. CTAs have already cut around 13% of historic net length, while ongoing tariff and inventory fragmentation risks support Copper but a softer demand backdrop limits upside.

Tariff delay shifts CTA positioning

"Copper and aluminum are in the crosshairs for CTAs today. Lack of an update on copper tariffs has removed a near-term supply risk, opening the red metal up to further selling, while a continuation of the Hormuz trade unwind weighs heavy on aluminum."

"The June 30th deadline for recommendations on refined copper tariffs under Section 232 came and went without any official update from President Trump."

"For flat prices however, short-term momentum is weaker again with the immediate supply risk event in the rearview mirror, prompting CTAs to once again liquidate some 13% of their historic net length."

"Looking forward, the continued risk of tariffs and inventory fragmentation will support the red metal, but a weakening short-term demand backdrop is likely to also cap any material upside."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)