Copper Hits a Record as Supply Snarls Set the Stage for Deficits
ca.finance.yahoo.com
Annie Lee and Mark Burton
Wed, October 29, 2025 at 2:36 a.m. PDT 3 min read
(Bloomberg) -- Copper hit a record high in London, with the prospect of an imminent easing in US-China tensions providing a fresh catalyst to a scorching rally built on mine-supply setbacks and tariff-driven trade dislocations.
Three-month futures climbed to $11,146 a ton on the London Metal Exchange, topping a previous peak set in 2024. Year-to-date, the metal that’s an industrial staple and a proxy for global growth is up more than a quarter, and is on course for its best year since 2017.
It’s been a tumultuous year for the commodity, with setbacks at major mines in Chile, Africa and Indonesia throttling global supplies, while US President Donald Trump’s tariff policies have caused extreme price distortions between the US and the global benchmark set on the LME.
Traders drew vast quantities of copper into the US in anticipation of proposed levies on the metal earlier this year, capitalizing on a surge in prices on New York’s Comex exchange.
In August, Trump ultimately decided to spare commodity-grade forms of the metal from the levies and placed them on value-added copper products instead, but left the door open to imposing them as of 2027. That’s led to copper continuously gravitating toward the US, exacerbating strains on supply for buyers elsewhere.
With mines worldwide spluttering and American inventories effectively stranded, Morgan Stanley predicts the global copper market will face its most severe deficit in more than 20 years in 2026.
Miners have been struggling to keep pace with copper demand for years, but this year the industry has been rocked by major incidents at operations run by Freeport McMoRan Inc, Ivanhoe Mines Ltd, and Chile’s Codelco, as well as operational snags at many other large deposits. Earlier this week, Anglo American Plc warned copper production from its most important mine would likely be lower than expected next year, following similar warnings from Teck Resources Ltd.
Tallied together, the production mishaps mean global annual copper production is on course to contract for the first time since the onset of the pandemic, according to CRU Group.
Trade Anxiety
It’s also been a mixed year for underlying demand, with long-term optimism about rising usage in renewable energy, electric vehicles and data centers being offset by more immediate anxiety about the burgeoning trade war.
Still, usage in China has proven resilient so far, with Beijing pledging to “significantly” boost the share of consumption in its economy. Now, hopes are rising that Trump and his Chinese counterpart Xi Jinping will soon strike a deal to dial down trade tensions between the world’s two biggest economies.
Trump is scheduled to meet with Xi at a bilateral summit on the sidelines of the APEC gathering in South Korea on Thursday. Ahead of that, Trump has talked up prospects for a deal between the two countries, saying he expects to lower tariffs the US has imposed on Chinese goods over the fentanyl crisis.
“Copper prices are being supported by a pick-up in risk appetite on optimism about a potential trade deal between the US and China,” said Craig Lang, a principal analyst at CRU Group. The metal has also been supported by the concerns about physical tightness in markets outside of the US, he said.
Copper — along with other commodities priced in US dollars — has also been aided this year by weakness in the currency, which makes raw materials more attractive for overseas buyers. Later on Wednesday, the Federal Reserve is expected to reduce interest rates again, which may hurt the greenback.
LME copper prices rose 0.4% to $11,085.50 a ton as of 9:34 a.m. London time, extending its year-to-date gain to more than 26%. Other metals were mixed, with aluminum and zinc notching small gains while nickel, lead and tin traded little changed. |
