Copper climbed to a three‑month high on Tuesday, driven by tightening supply on the London Metal Exchange (LME) and an improved risk appetite linked to hopes of easing US–China trade tensions.
Market attention remains fixed on tariffs, which continue to shape global metal flows and prices.
Supply squeeze
LME copper is set to close out the first half of the year with a gain of 12%, beaten only by the tin market, largely due to the investigation into US copper imports announced by US President Donald Trump in February.
There’s been a rapid drawdown in inventories on the London Metal Exchange and in China recently after traders moved record volumes to the US in a bid to front-run tariffs proposed by the White House.
LME stocks have dropped by about 65 % this year, while CME warehouse holdings more than doubled.
Spot copper contracts traded at steep premiums to those for later delivery, a market structure known as backwardation that indicates tight supply.
The so-called Tom/next spread, the premium of copper due for delivery in one day to contracts expiring a day later, widened again on Tuesday after peaking at $98 a tonne last week, the highest since 2021.
Improved risk sentiment, amid signs of thawing trade discussions between China and the US, helped push prices even higher.
Bullish case
Copper rose 0.9% to $9,960 a tonne on the LME as of 8:39 a.m. local time. It touched $9,984 earlier, the highest since March 27.
Copper for delivery in September rose more than 2.16% to a high of $5.1925 per pound, or $11,423 per tonne, in early trading on the Comex market on Tuesday—approaching the all-time high of $5.277 per pound set in March.
In a recent note quoted by Bloomberg, investment bank Goldman Sachs said it expected LME prices to rise to a 2025 peak of roughly $10,050 a tonne in August, as supplies outside the US continue to tighten.
“The market is expecting Chinese smelters to lift exports to help fill the supply-chain gaps, but until they do the London copper market is a dangerous place for bears,” Reuters columnist Andy Home wrote.
“Everything will change again when the US administration decides whether to impose import tariffs. That presages more turbulence ahead of the November deadline for the Section 232 investigation into US imports to be completed.”
(With files from Reuters and Bloomberg)
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