Copper Prices Surge Amid Weaker Dollar and Tightening Supply

Copper prices have experienced significant growth from late July to early August 2026, driven by firm fundamentals and shifts in macro influences. Geopolitical risks, Federal Reserve policy shifts, and U.S. trade measures have had varying impacts on copper prices through different channels.

The U.S. dollar index declined sharply due to weaker-than-expected U.S. economic data and easing inflation. The second-quarter GDP growth fell short of market expectations, consumer spending decelerated, and underlying economic momentum weakened. This led to the Federal Reserve keeping interest rates unchanged at its July meeting, putting further pressure on the dollar.

A weaker U.S. dollar provided direct support for dollar-denominated commodities, while concerns over supply availability fueled by expectations of additional U.S. tariffs on refined copper pushed prices higher. Tightening raw-material supply continued to strengthen price support, driving the SHFE copper contract sharply higher and reaching an intraday peak of Yuan 108,470/tonne.

Looking ahead, persistently tight raw-material supply and structural demand growth from emerging sectors will continue to provide long-term support for copper prices. However, macro factors will remain the key source of short-term volatility, with geopolitical risks, inflation expectations, and tariff uncertainty remaining major risks.