Copper Rallies as Tight Inventories and Weak Dollar Boost Demand

Copper prices surged on Thursday as concerns over tight inventories resurfaced and a weaker dollar supported demand. The benchmark three-month copper contract on the London Metal Exchange rose 1.4% to $13,767 per metric ton in official open outcry activity.

The decline in copper stocks outside the US, particularly in LME and Shanghai Futures Exchange inventories, added to the upward momentum. According to StoneX analyst Natalie Scott-Gray, the market is shifting from one driven by macro sentiment towards one characterized by genuine physical tightness due to weather-related disruptions to mine supply and falling stocks.

The dollar index edged down 0.1% after hitting a one-week low in the previous session, making greenback-denominated commodities more affordable for buyers using other currencies. COMEX copper stocks stood at a record 644,465 metric tons, nearly double the combined inventories of LME and ShFE.