Insights 
VT 
Copper and PGMs are in focus as traders stockpile these metals, impacting global inventories. Demand is bolstered by shifts such as the US de-urbanisation and China’s move towards SUVs and electrification.
The de-urbanisation trend in the US affects PGM demand and scrap supply. Demand for Copper and aluminum is rising due to consumer preference for SUVs, particularly in China’s auto sector amid electrification efforts.
The AI hardware race may influence predictions for Copper and aluminum. This is amidst growing competition in China, adding another dimension to the demand forecast.
Given the aggressive stockpiling in copper and PGMs, we see a clear signal to position for higher prices. Global inventories are being drained, with LME copper stocks having recently fallen below 50,000 tonnes, a level not seen since the supply squeeze of the early 2020s. This suggests that any further increase in demand will create a violent price reaction, making long positions in futures or buying call options attractive.
The de-urbanization trend that accelerated after 2020 is now a structural force, tightening the supply of scrap metal from dense urban centers. At the same time, US vehicle miles traveled in the third quarter of 2025 hit a new record, boosting demand for PGMs used in the catalytic converters of larger gasoline-powered SUVs. We believe this dynamic will continue to support palladium and platinum prices well into next year.
China’s auto sector remains a primary driver for demand, with electric SUV sales for November 2025 accounting for over 45% of all new vehicle registrations. This electrification and lightweighting boom is consuming vast amounts of copper and aluminum, a trend that is showing no signs of slowing down. We should therefore view any price dips in these metals as strategic opportunities to add to long positions.
The AI hardware race is an underappreciated catalyst that could dramatically shift demand forecasts upward. Major tech firms just announced another $200 billion in planned data center expansions for 2026, creating an almost inelastic demand base for copper in wiring and cooling systems. This new demand stream is competing for the same limited supply that traditional sectors rely on.
These markets are vulnerable to a squeeze, as physical stockpiles are clearly being diverted from exchange warehouses. Our strategy is to maintain a bullish stance, using options to capitalize on the expected volatility and upside. The fundamental story is strong, supported by structural changes in consumer behavior, electrification, and the explosive growth of AI infrastructure.
