Copper prices remained resilient above $14,000 a ton, despite earlier fluctuations. This stability is largely attributed to a revised, weaker outlook for US interest rates, which typically boosts investor appetite for commodities. Futures on the London Metal Exchange settled at $14,103.50 a metric ton, nearing the record high of $14,527.50 reached in January, following a surge in July where over 200,000 tons of copper arrived at US ports.
The market continues to grapple with a tight physical supply, with inventories outside the US remaining low. Analysts, such as Ewa Manthey, commodity strategist at ING Bank, note that copper is receiving support from a combination of tariff-driven stockpiling and increasingly tight physical market conditions. This environment has also led to a significant increase in shipments to both the US and China, exacerbating supply constraints elsewhere.
The ongoing competition for copper between the US and China, coupled with anticipation of President Donald Trump's decision on import tariffs, is further tightening the market. This surge in demand and reduced availability for other global buyers has contributed to the elevated prices. While prices slipped slightly on Friday, they still ended the week 2% higher, with ING analysts Warren Patterson and Ewa Manthey highlighting that tight physical markets and ongoing supply-side challenges are expected to keep prices well supported and potentially increase volatility.
Comex copper futures also remained close to record levels, reflecting the broader bullish sentiment in the copper market. The diversion of metal into the US ahead of potential tariff decisions is a key factor, leaving availability tighter in other regions and bolstering prices across global exchanges. This dynamic suggests that copper fundamentals remain supportive, with prices potentially heading towards new record highs soon.
