Copper Surges Past $14,000 as Physical Market Conditions Tighten
Copper prices have surged above $14,000 per tonne on the London Metal Exchange (LME), driven by tightening physical conditions and strong prompt demand. According to ING's Warren Patterson and Ewa Manthey, falling LME inventories, deeper backwardation, improved speculative positioning, and ongoing supply challenges are supporting a constructive view for copper.
Tight inventories and strong demand are creating a challenging environment outside the US, where large volumes of copper have been drawn into amid uncertainty over potential import tariffs. This reduction in availability has left inventories elsewhere at multi-month lows, while the market has moved deeper into backwardation, signaling strong demand for prompt supply.
The ongoing shipments to China and limited buffer stocks across the market are also contributing to tight availability. Meanwhile, speculative sentiment improved in copper and aluminium, with copper net longs rising by 6,863 lots to 54,946 lots.