Copper headed for a record close after strong gains fuelled by signs of tighter short-term supply across the global market.
The metal traded as much as 0.9 per cent higher on the London Metal Exchange (LME), putting it above the closing record that was set in mid-May. While growing optimism about demand from data centres and power grids is underpinning the advance, supply-side factors have been just as critical.
Huge volumes of copper have been shipped into the US in 2026 in anticipation of a decision on import tariffs by President Donald Trump, pulling metal away from LME-tracked warehouses worldwide.
Meanwhile, there has also been more buying activity from China, sharpening competition for supplies.
Copper – used in wires and cables – has rallied around 14 per cent so far in 2026, building on a run of three annual gains. The commodity’s long-term upswing has its roots in the rising need for electrification powered by the energy transition.
At the same time, ore grades at some existing mines have been declining, while major new pits are getting harder and more costly to develop.
“Copper fundamentals remain supportive,” ING Bank NV analysts including Ewa Manthey said in a note.
“Tight physical markets, low inventories and constrained mine supply should continue to underpin prices.”
Much depends on the scope and timing of any announcement on US import tariffs on refined metal.
Expectations for a levy have kept New York copper prices higher than those on the LME, offering a highly profitable opportunity for traders before any fees are imposed. Stockpiles in the US have ballooned.
Mixed Signals
However, there’s a risk that the unusual trade flows triggered by the tariff uncertainty are obscuring broader headwinds as the global economy wavers.
Copper’s “most credible downside risk” is a prolonged Iran war and continued resilience in Chinese output, Bloomberg Intelligence said in a note on Aug 6. Those factors could widen the gap of supply over demand to half a million tonnes in 2026, they wrote.
For now, among the clearest indicators of tighter near-term supply is the widening premium of cash prices over three-month futures on the LME.
On Aug 6, the spread flared to more than $150 a ton at one point, the most since October 2025. The structure, known as backwardation, is a sign of short-term pressure on buyers.
Copper rose 0.7 per cent to $14,201 a ton on the LME as of 1.57pm in Shanghai, and is on pace for a sixth weekly gain, the longest run since 2020. Other metals also advanced, with zinc on course for a weekly gain of around 4 per cent to near a four-year peak, while aluminium was at the highest since June. BLOOMBERG
