Copper Prices Soar Amid US-China Metal Scramble
Copper prices are nearing record highs as the US and China engage in a scramble for critical metals essential to the growth of the artificial intelligence (AI) industry.
The three-month copper futures on the London Metal Exchange (LME), the global benchmark, stood at $13,791 per metric ton as of July 31, trading near the all-time high of $14,527.50 per ton set on January 29.
The driving force behind the rally is a tightening supply-demand balance, with LME copper inventories trending lower and the key price spread indicating near-term supply shortages widening.
Chinese copper smelters are facing difficulties procuring raw materials, including copper concentrate and copper scrap, due to domestic mine development failing to keep pace with demand and reliance on imports rising.
The Trump administration's potential imposition of tariffs on copper could disrupt flows of copper destined for the US, further tightening the global supply-demand balance.
As long as the supply squeeze persists, prices are expected to remain elevated, according to one commodities analyst.