Copper Prices Reach New Heights Amid Tight Physical Market

Copper prices have been climbing for six consecutive sessions, reaching new heights as Chinese buyers stock up ahead of upcoming holidays and dwindling inventories in Shanghai and London point to a physical market running short on metal.

The most-active Comex copper contract rose by as much as 1.6% to $6.8710 per pound in New York, nearing the record settlement of $6.8885 set last September. Benchmark three-month copper on the London Metal Exchange also increased by 0.7% to $14,766 a tonne, within 1% of its peak from late September.

The physical market is tightening due to low stocks in Shanghai and London warehouses, with imported metal being consumed quickly rather than stored. Ewa Manthey, commodities strategist at ING, attributed the copper price support to 'tightening physical market conditions in China', with falling inventories offsetting uncertainty over US tariffs.