Copper Surges Amid Copper Shortages, Aluminium Prices Retreat

Aluminium prices have retreated from their recent highs as investors locked in profits, but the underlying trend remains strong. The benchmark three-month aluminium price on the London Metal Exchange slipped 0.2% to $3,251 a metric ton by 1615 GMT.

Copper, however, has defied expectations and surged 9% since touching a seven-week low on June 24 due to declining inventories and tight supply outside the US. The LME copper price added 0.2% to $14,171 after earlier trading in the red.

The extreme backwardation of prompt copper prices, with prices for immediate delivery higher than those further forward, underscores a severe lack of inventories. This phenomenon has pushed the premium of the cash LME copper contract above the three-month forward to $434 a ton, its strongest since October 2021.

LME copper inventories have plummeted by 48% since late May to 204,975 tons, exacerbating concerns about supply shortages.