Copper prices rise amid supply tightness and AI demand

Global commodity markets are showing divergent trends driven by China’s uneven economic performance and shifting supply flows. While the Chinese property downturn continues to weigh on steel consumption and iron ore demand, manufacturing and electrification are providing support for industrial metals.

Copper prices have seen significant strength, driven by structural supply tightness. Inventories on the London Metal Exchange have decreased significantly since May, partly due to shipments moving to the United States in anticipation of potential tariffs. Additionally, inventories on the Shanghai Futures Exchange have seen consecutive declines, signaling deepening supply constraints. Demand for copper is further bolstered by robust AI infrastructure requirements, as evidenced by recent earnings from Nvidia.

In contrast, iron ore prices have seen limited upside due to weak construction demand in China, despite a recent increase in port arrivals. Meanwhile, oil prices have retreated as global supply concerns eased.