(Sept 8): Copper extended gains, hitting a record for a second straight session, as tight near-term supplies and expectations that the US will impose tariffs on imports of refined metal buoyed prices.
The industrial metal rose for a fourth day on the London Metal Exchange, touching an all-time peak of US$14,635 a tonne. Copper has rallied about 17% this year, supported by a long-term mismatch between constrained mine supply and growing demand from data centers, renewable energy equipment and power grids.
Shorter-term tightness has been amplified by a massive shift of refined copper toward the US, to capture higher prices due to the prospect of tariffs. The flows have drained stockpiles in LME warehouses. That triggered a severe squeeze last month and kept the futures curve in steep backwardation, a market structure that indicates a dearth of supply.
“We’re in a market right now that’s tight,” Evy Hambro, global head of thematic and sector investing at BlackRock International, said on Bloomberg TV, noting that the scale of supply disruptions has been much higher than normal. “It’s also been accentuated by some of the tariff discussions that we’ve seen in the US.”
Demand in China, the world’s biggest copper consumer, is also expected to pick up as the market enters a traditional peak season for manufacturing, following a recent lull. Inventories in Shanghai Futures Exchange warehouses fell to the lowest since 2024 last week.
“It should be easy for copper to reach US$15,000,” said Jia Zheng, a trading manager at Suzhou Chuangyuan Harmony-Win Capital Management Co. Orders from State Grid Corp of China are looking good, based on conversations with clients, she said.
Operational issues at major copper projects are fueling concerns over supply, with global mined production at risk of posting its first annual decline since 2017 unless output recovers in the second half.
Three-month copper futures rose 0.7% to US$14,608.50 a tonne on the LME as of 10:40am local time, after being up as much as 0.9% earlier. Other metals were mixed, with nickel rising 0.7%, zinc adding 0.3%, and aluminum trading little changed. Iron ore futures advanced 0.5% to US$100.80 a tonne in Singapore.
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