Copper Prices Soar to Record High Amid Tight Supply and Tariff Worries

Copper prices have surged to new record highs on the London Metal Exchange (LME), reaching $14,617 a ton as tight supply and tariff worries continue to buoy prices. This marks the second straight session where copper has hit an all-time peak.

The industrial metal has rallied around 17% this year, driven by a long-term mismatch between constrained mine supply and growing demand from data centers, renewable energy equipment, and power grids.

A significant contributor to the current tightness is the massive shift of refined copper toward the US to capture higher prices due to tariff expectations. This has drained stockpiles in LME warehouses, triggering a severe squeeze last month that kept the futures curve in steep backwardation, a market structure indicating a dearth of supply.

Demand in China, the world's largest copper consumer, is expected to pick up as the market enters its traditional peak season for manufacturing. Inventories in Shanghai Futures Exchange warehouses fell to their lowest level since 2024 last week.