Copper and Crude Prices Soar to Record Highs Amid Global Supply Chain Shift

Copper and crude oil prices have surged to record highs, driven by a combination of factors. Copper three-month futures on the London Metal Exchange hit an all-time high of $14,617 per tonne, while Brent crude inched closer to the $100-per-barrel mark. The rally is attributed to tightening mine supply, shifting global trade flows amid potential US tariffs on refined copper, and accelerating demand from electrification, renewable energy, power infrastructure, and AI.

The rise in prices of these commodities has raised concerns about inflationary pressure and the possibility of a rate hike by the Reserve Bank of India. If crude prices sustain near or above $100 per barrel, it could add to the inflationary pressure, increasing the chances of a rate hike.

The rally in copper prices is also attracting investors to buy stocks of companies that are likely to benefit from higher prices. Among the copper miners and producers, Hindustan Copper closed 4.7% higher, while Vedanta rose 1.3%. The oil stocks also saw gains, with Oil India rising 2.1% and ONGC up by 1%.

However, the surge in copper prices could increase input costs for sectors such as real estate, cables & wires, electrical & electronic equipment, and power production, transmission & distribution. According to a report by Anarock Property Consultants, mechanical, electrical & plumbing (MEP) costs in the real estate sector have risen by 8-12%, partly due to the rising prices of copper.