Copper tariffs, arbitrage, and renewed uncertainty in the market

Financial Hedging 101

Managing financial risk often requires a precise understanding of the concepts and instruments involved. Below is a glossary of the most relevant terms in the world of [https://inhedge.mx/en/financial-hedging-glossary/]financial hedging [https://inhedge.mx/en/financial-hedging-glossary/], explained in a clear and concise way. Get full access to InHedge - Commodity Hedging at inhedge.substack.com/subscribe [https://inhedge.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Financial hedging for copper prices

Financial hedging [https://inhedge.mx/en/copper-hedging/] is a strategy aimed at reducing the risk associated with fluctuations in variables such as exchange rates, interest rates, or, in this case, commodity prices like copper. The principle behind a hedge is to offset potential losses in the main operation with gains from a correlated financial instrument. In the case of copper, this involves locking in or limiting the price at which the metal will be bought or sold through contracts such as futures, forwards, or options. Get full access to InHedge - Commodity Hedging at inhedge.substack.com/subscribe [https://inhedge.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Copper tariffs, arbitrage, and renewed uncertainty in the market

As copper tariffs [https://inhedge.mx/en/copper-tariffs-2025/]discussions continue in the United States, inter-exchange spreads and structural supply constraints are shaping copper market behavior. The copper market is currently driven more by external developments than by direct consumption signals. Conversations between producers, consumers, and investment funds during “Copper Day” in New York highlighted how administrative decisions and trade logistics are now exerting influence comparable to market fundamentals. Get full access to InHedge - Commodity Hedging at inhedge.substack.com/subscribe [https://inhedge.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

Copper spread – Tariffs trigger opportunity

In recent weeks, the copper market [https://inhedge.substack.com/p/copper-trade-dynamics-shift-with?r=2jr0jc] has shown a notable shift in pricing dynamics between COMEX) and LME futures contracts. From late April to mid-May, the Dec-25 spread narrowed from $1,708 per metric ton to $1,113, reflecting a reassessment of geopolitical risk, policy uncertainty, and trade expectations. This adjustment is not tied to new policy announcements, but to the market recalibrating its expectations regarding potential import tariffs on refined copper in the United States. Learn more here. [https://inhedge.mx/en/copper-spread-tariffs-trigger/] Get full access to InHedge - Commodity Hedging at inhedge.substack.com/subscribe [https://inhedge.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]

LNG terminal use drops in China

China’s LNG terminal utilization rate remains historically low at 43.57% in March 2025, holding steady after the sharp plunge recorded earlier in the year. This follows a dramatic drop from December 2024 levels, where utilization briefly spiked above 70%, highlighting the shift from peak winter demand to a structurally weaker spring market. Compared to March 2024, when utilization hovered near 60%, the current rate reflects a roughly 27% year-on-year decline, underscoring the scale of the adjustment in terminal activity. The low throughput is consistent with subdued LNG imports and weakened industrial demand, and it suggests that domestic production and alternative supply strategies are playing a greater role in meeting energy needs. While re-exports and cautious spot buying may offset part of the volume decline, the sustained underutilization of regasification infrastructure raises questions about longer-term import planning and signals a subdued near-term outlook for LNG inflows . Get full access to InHedge - Commodity Hedging at inhedge.substack.com/subscribe [https://inhedge.substack.com/subscribe?utm_medium=podcast&utm_campaign=CTA_4]