Copper prices approach record highs on supply scarcity

Copper prices are approaching record highs, driven by tightening supplies and surging demand in China. Benchmark three-month copper on the London Metal Exchange has climbed toward the $14,875 per tonne record set in early September.

Key drivers of the rally include shrinking inventories in China, with Shanghai Metals Market reporting levels at their lowest since 2023. Additionally, the Yangshan copper premium—a key indicator of Chinese demand—has reached its highest level in nearly four years. Supply concerns are further compounded by planned maintenance at several Chinese refineries scheduled for October and November, as well as port congestion in Shanghai.

In the United States, Comex copper prices have also seen significant gains. While recent Federal Reserve interest rate hikes initially created market uncertainty, speculative buying has returned. Market analysts note that the physical economy is increasingly repricing scarcity, particularly as copper remains critical for power grid expansions and AI infrastructure. Mining companies such as Freeport-McMoRan have seen positive stock performance in response to these price movements.