Copper prices on the London Metal Exchange (LME) are currently close to record highs, according to Commerzbank’s Barbara Lambrecht, who points to an unusually large cash–3‑month spread. This spread is attributed to falling LME copper stocks and pre-emptive buying in the US related to tariffs [1]. Supply concerns are mounting due to weak smelter margins and the potential for production cuts in both China and the Democratic Republic of the Congo [1].
Lambrecht highlights that while the deadline for a key report has passed, the surge in copper imports is expected to continue in the short term [1]. However, risks are present on both the supply and demand sides. US demand could slow if customs duties on refined copper are postponed, which would provide temporary relief to US market participants [1]. Conversely, supply could fall short if production growth in China and the Democratic Republic of the Congo, two major growth markets in recent years, slows significantly [1].
Looking ahead, Commerzbank warns of a medium- to long-term supply shortfall in the copper market, driven by technological and energy policy shifts that are increasing global demand [1]. The International Energy Agency (IEA) forecasts a supply shortfall of 25 percent by 2035 under current conditions [1].
CONCLUSION
Copper prices are being supported by tight supply conditions and robust demand, but both supply and demand risks remain. Commerzbank and the IEA warn of a significant medium- to long-term supply deficit, suggesting continued market tightness and potential upward pressure on prices.