Copper Rallies to Record on US-China Hopes and Supply Setbacks

i87}jrv27yrc74{4sfwtbdgn_media_dl_1.png Morgan Stanley, Bloomberg

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(Bloomberg) — Copper rose to a record high, with the US and China on the cusp of a sweeping deal to dial down trade tensions, while a series of supply setbacks at leading mines have tightened the global market.

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Three-month futures climbed to $11,146 a ton on the London Metal Exchange, topping the peak set in 2024. Year-to-date, the metal that’s an industrial staple and proxy for global growth is up more than a quarter.

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In Asia, US President Donald Trump is scheduled to meet with Chinese counterpart Xi Jinping at a bilateral summit on the sidelines of the APEC gathering in South Korea on Thursday. Ahead of that, Trump has talked up prospects for a deal between the world’s two largest economies. 

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It’s been a tumultuous year for copper, one of the world’s most crucial commodities. Prices have been roiled by Trump’s trade war and sectoral sanctions, which drew vast quantities of metal into the US. There’s also been a spate of mishaps at major mines, including a mudslide at Freeport McMoRan Inc.’s vast Grasberg mine in Indonesia.

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“Copper prices are being supported by a pick-up in risk appetite on optimism about a potential trade deal between the US and China,” said Craig Lang, a principal analyst at CRU Group. The metal has also been supported by the concerns about physical tightness in markets outside of the US, he said.

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Copper futures rose 0.7% to $11,114 a ton on the LME as of 7:32 p.m. in London.

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On the demand front, there’s widespread optimism about the need for greater volumes of copper to service the energy transition and the build-out of artificial intelligence data centers. In addition, China has pledged to “significantly” boost the share of consumption in its economy.

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Earlier this week, Anglo American Plc warned that copper production from its most important mine would likely be lower than expected next year, adding to the already tight market. That follows disruptions at other mines from South America to Central Africa.

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Stockpiles of copper held in LME-tracked warehouses — a vital window on the market’s global supply-and-demand balance — have been drawing in recent weeks. At present, inventories have dropped to the lowest level since July. Still, stockpiles tracked by Comex in the US remain elevated.

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Copper — along with other commodities priced in the dollar — has also been aided this year by weakness in the US currency, which makes raw materials more attractive for overseas buyers. Later Wednesday, the Federal Reserve is expected to reduce interest rates again, which may hurt the greenback.

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—With assistance from Katharine Gemmell.

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