Key Takeaways
- Copper prices fell below their all-time high as US inventories continue to rise.
- Analysts predict prices could reach $15,000 this week due to policy-driven factors.
- US imports of copper have surged, tightening supply in other markets.
Copper prices dipped below their record high on Wednesday, with the benchmark three-month copper on the London Metal Exchange falling 0.55% to $14,628 a metric ton by 0245 GMT. This came after the metal had reached an all-time high of $14,779 on Tuesday.
The most-traded copper contract on the Shanghai Futures Exchange rose 0.44% to 110,740 yuan ($16,509.38) a ton, indicating a mixed market response to the price fluctuations.
COMEX copper inventories have been on the rise, reaching 797,275 short tons, or 723,275 metric tons as of Tuesday, according to the Business Recorder. This build-up in US inventories is expected to tighten supply in other markets, contributing to the price volatility.
Some analysts now anticipate that copper prices could touch the $15,000 level for the first time this week, driven by policy factors. ING, in a recent note, stated that the rally in copper prices looks increasingly policy-driven, and prices could correct sharply if tariffs are delayed or ruled out.
Natalie Scott-Gray, a senior metals analyst at brokerage StoneX, estimated that more than 1.2 million metric tons of copper have entered the US since Washington launched its Section 232 investigation into copper in February last year. This influx has left available material outside the country at historically low levels, exacerbating supply constraints.
In China, the world’s largest copper consumer, factory-gate inflation accelerated in August, driven by rising energy costs. Producer prices rose 3.8% from a year earlier, up from 3.5% in July, while consumer inflation quickened to 0.8% from 0.5%. However, underlying domestic demand remained subdued.
Among other LME metals, aluminium fell 0.25%, zinc dropped 0.56%, lead slipped 0.16%, nickel declined 1.08%, and tin eased 0.11%. On the Shanghai Futures Exchange, aluminium rose 0.49%, zinc added 0.04%, and lead gained 0.50%, while nickel fell 0.23% and tin dropped 0.32%.
The fluctuation in copper prices highlights the complex interplay between global trade policies, supply chain dynamics, and market sentiment. As the US inventory build-up continues, analysts are closely monitoring the situation for any potential shifts in the market.
