Copper Prices Advance Toward Record on London Metal Exchange

Copper prices are advancing toward a record on the London Metal Exchange (LME), driven by strong demand and limited supply. The metal's spot price has traded as much as $543.50 per tonne above contracts for delivery in three months, marking the biggest gap since a major squeeze in 2021.

The backwardation structure, which indicates near-term demand outstripping availability, is a hallmark of this market. Copper prices have surged almost 16% this year, largely due to a massive flow of metal into the US in anticipation of potential tariffs under the Trump administration.

BNP Paribas SA's head of metals strategy, David Wilson, notes that copper is 'moving into overbought territory' but believes it may still reach its January record. Three-month futures have advanced as much as 1.7% to $14,396 per tonne on the LME.

The current situation has created a market squeeze, where holders of short positions must buy back contracts at escalating prices or scramble to secure physical metal for delivery. This is particularly pressing ahead of the third Wednesday of the month delivery date, which focuses liquidity in the LME's contracts.