Looking to the Futures

Copper futures (/HG), currently calling for September delivery) reached a record intraday high of $5.5985 on Thursday. That peak was the eighth record high for the year. Copper futures are up 44% for the year.

As has been the case with a few of the earlier records, tariff news drove much of the move. On July 8, President Trump announced that he will impose a tariff of up to 50% on copper starting August 1. That would move copper tariffs in line with the 50% import duties on steel and aluminum. Copper jumped by 90 cents on the announcement, rallying to an all-time intraday high of $5.8955 before settling at a record high of $5.6855. Prior to that, an executive order signed February 25 directed the Department of Commerce to investigate potential national security risks of copper imports under Section 232 of the Trade Expansion Act of 1962. Executive orders have been a prelude to tariffs in prior years. Over the following month, copper rallied to a new intraday record of $5.374.

The impending tariffs are contributing to a widening spread on copper prices between the London Metals Exchange (LME) and COMEX, the domestic copper futures exchange. The spread has increased from 65 cents/lb in early July to $1.40 on Thursday. That represents a 31% premium for domestic supplies. The announcement of the Section 232 investigation in February also kicked off a rush to get the red metal onshore. Imports totaled over 540,000 tons during March April May, about 60% of imports for all of 2024. COMEX-registered warehouse contained over 240,000 tons as of Wednesday, an increase of over 150% from February.

In other international news, the Chile Minister of Finance told the National Congress that the estimated price of copper for the year increased from $4.26 to $4.28 and increased the forecast for next year’s copper price. He also reported that impaired operations at the Collahuasi mine were impacting supply. The strength of the Chilean peso is also contributing to higher copper prices. The dollar is down approximately 4.2% year-to-date against the Chilean peso. Chile is the source of around 65% of refined copper imports. Exchange rates in general are also contributing to higher prices on commodities, with the dollar index ($DXY) down around 11% on the year.

Domestically, mine prospecting company Northern Dynasty Minerals and the EPA were unable to come to an agreement to move forward on a mining project in Alaska. The potential development, called the Pebble Project, could contain up to 53 billion pounds of copper. The EPA vetoed the project on concerns of impacts to the environment, with the EPA forecasting the project endangering Bristol Bay and sockeye salmon runs. In Arizona, litigation is ongoing on a potential mining project by Rio Tinto and BHP Group. The Oak Flat project is expected to contain 40 billion pounds of economically recoverable copper. Environmental groups and members of the San Carlos Apache tribe oppose the project on environmental and religious grounds.

In copper-adjacent economic news this week, the Richmond Fed Manufacturing Index came in at -20, below expectations of a decline two-point decline and the worst number since September. Flash Manufacturing PMI also declined to 49.5, lower than the forecast for an expansion to 52.7. Existing home sales and new home sales were also lower than expected. On the other hand, initial jobless claims were lower than expected at 217k versus 227k expected. That was the fourth consecutive week of lower-than-expected claims and the lowest since April on a seasonally adjusted basis.

With the contract trading at an all-time high, we can look back at recent SMA crosses. The 9-day and 20-day crossed below the 50-day SMA following the Liberation Day selloff, followed by a recovery bringing them all together in early May. That recovery was followed by a mild uptrend through early June which took the 9- and 20-day above the 50-day where they have stayed. The MACD is positive, but below the peak following the spike on July 8. The new all-time highs (white lines) have coincided with the RSI reaching overbought levels.

Durable Goods -ex transportation 8:30 AM ET

Durable Orders 8:30 AM ET

New futures products are available to trade with a futures-approved account on all thinkorswim platforms: 

• Ripple (/XRP)
• Micro Ripple (/MXP)
• Micro Corn (/MZC)
• Micro Wheat (/MZW)
• Micro Soybean (/MZS)
• Micro Soybean Oil Futures (/MZL)
• Micro Soybean Meal Futures (/MZM)
• 1 OZ Gold (/1OZ)
• Solana (/SOL)
• Micro Solana (/MSL)

Visit the Schwab.com Futures Markets page to explore the wide variety of futures contracts available for trading through Charles Schwab Futures and Forex LLC.