The global copper market faces significant supply-side pressure due to its dependency on diesel. Specifically, Chile, a key producer, relies on U.S. diesel imports for over 70% of its mining industry's fuel. A potential U.S. diesel ban could create severe knock-on effects for global copper supply.
Despite total Middle East oil shipments reaching 89% of pre-war levels, the recovery is lopsided. Crude oil flows are at 98%, essentially normalized. However, refined product exports are severely depressed at only 58%, explaining persistent pressure on markets like diesel fuel.
Gold's strength despite rising real yields is unusual because its negative correlation has weakened significantly. This is attributed to new, sustained ETF inflows from long-term retail investors who view gold as a portfolio diversifier, breaking from the historical pattern of rates-driven institutional flows.
China is creating a strong pull on global copper prices. Onshore inventories are critically low at just 75,000 tons heading into a peak seasonal demand period. This scarcity is compounded by disrupted domestic scrap supply and stumbling global mine output, forcing China to increasingly seek refined copper units.