Copper Prices Soar to Record High Amid Tight Supplies and Dollar Weakness

Copper prices soared to an all-time high on Monday as concerns about tight supplies outside of the US fueled buying, while a weaker dollar added to the positive sentiment. Benchmark copper on the London Metal Exchange reached $14,533 per metric ton, surpassing its previous record high of $14,527.50 set in January.

Despite volumes being muted due to a US holiday, traders and producers have been shipping large volumes of copper to the US since President Donald Trump's import tariffs were first mooted last year. This has led to Comex copper stocks reaching a record 766,795 short tons or 695,624 metric tons.

However, as uncertainty over tariffs persists, analysts believe prices will remain elevated as material continues to flow to the US. Elevated premiums for nearby contracts over longer-dated forwards have encouraged some copper to flow back to the LME, but cancelled warrants indicate that over 121,000 tons of copper is likely to leave the LME system in the coming weeks.

The premium for cash copper over the three-month forward contract climbed above $430 per ton in August, its highest level since 2021. Inventories monitored by the Shanghai Futures Exchange also show a significant decline, down 85% since March and at their lowest level since January 2024, indicating tightening supplies outside of the US.