Copper Prices Hit Record High as Tight Supplies Fuel Buying

Copper prices have reached a record high on the London Metal Exchange (LME), surpassing its previous all-time peak in January. The benchmark copper price touched $14,533 a metric ton before paring gains to $14,518 by 1515 GMT, up 0.7%. This surge is attributed to tight supplies outside of the U.S., with traders and producers shipping large volumes of copper to the U.S. since President Donald Trump first mooted import tariffs in February last year.

The record high copper prices are also influenced by a softer dollar, which makes dollar-priced metals cheaper for holders of other currencies. Elevated premiums for nearby contracts over longer-dated forwards have encouraged some copper to flow back to the LME, while cancelled warrants indicate that more than 121,000 tons of copper is likely to leave the LME system over the next few weeks.

Copper prices on the Shanghai Futures Exchange (SHFE) are also in backwardation, suggesting that the industry in top consumer China is increasingly concerned about supplies. Stocks in warehouses monitored by the SHFE have decreased by 85% since March and stand at their lowest level since January 2024.