Copper prices have surged above $14,000 per tonne on the London Metal Exchange (LME), reaching their highest level in two months, according to ING analysts Warren Patterson and Ewa Manthey. This rally is attributed to tightening physical market conditions, with falling LME inventories and deeper backwardation indicating strong demand for prompt supply. Large volumes of copper have been drawn into the US due to uncertainty over potential import tariffs, which has reduced availability in other regions and left inventories outside the US increasingly tight. Ongoing shipments to China and limited buffer stocks are further supporting the tightness in the market [1].
Exchange data shows that LME inventories have dropped to multi-month lows, and the market's move into deeper backwardation signals robust demand for immediate delivery. Speculative sentiment has also improved, with copper net longs rising by 6,863 lots to 54,946 lots. In comparison, aluminium net longs increased by 1,170 lots to 60,434 lots, while zinc net longs fell by 3,739 lots to 35,997 lots, ending a four-week streak of gains [1].
ING maintains a constructive outlook on copper, citing low inventories, ongoing supply challenges, and strong long-term demand drivers as factors likely to keep the market supported [1].
CONCLUSION
Copper's breakout above $14,000 per tonne is underpinned by tightening supply, strong demand, and improved speculative positioning. With inventories at multi-month lows and ongoing supply challenges, analysts expect the copper market to remain well-supported in the near term.