Copper Surges Amid Global Supply Squeeze, Oil Retreats
China-linked commodity markets sent mixed signals last week. Raw materials tied to heavy industry remained relatively subdued, while copper strengthened sharply and oil retreated as global supply fears eased.
The divergence reflects an uneven Chinese economy, with weak property-related demand continuing to weigh on steel consumption even as manufacturing, electrification, and infrastructure support demand for industrial metals.
Copper told a different story. Three-month copper on the London Metal Exchange rose to about $14,363 per tonne on August 26 from $13,890 on August 19, an increase of roughly $473, or 3.4%. The move was driven less by a sudden Chinese demand surge than by distorted global supply flows: expectations of future US tariffs have drawn large quantities of copper into American warehouses, tightening availability elsewhere.
Oil moved in the opposite direction. ICE Brent settled at $87.84 a barrel on August 26, down from $91.62 on August 19, a fall of $3.78, or 4.1%. Progress in Iran-Oman talks raised hopes that traffic through the Strait of Hormuz could improve, reducing the geopolitical premium built into prices.