Copper Firms Up as Supply Disruptions Persist

Copper futures rebounded to above $5.85 per pound as a sharp correction in the dollar and opportunistic dip-buying from Chinese fabricators offset the initial geopolitical shock. The rally gained momentum as the US dollar index retreated from recent highs, making greenback-denominated metals more attractive for international buyers. In China, spot premiums rose for a fifth consecutive session because the previous price drop below the 100,000 yuan threshold spurred a wave of downstream procurement for the construction and renewable energy sectors. Market participants also focused on midstream stress as annual copper smelting refining charges plummeted to $0 per tonne in 2026, signaling a severe global shortage of copper concentrate that threatens refined output. While record-high exchange inventories in Shanghai initially capped gains, the narrative of long-term structural deficits tied to AI data centers and defense spending continues to provide a floor for the red metal.

Copper futures dropped below $5.7 per pound on Monday, hitting multi-week lows amid fears that the conflict in the Middle East could last longer than anticipated and lead to sustained economic disruption. Oil topped $100 for the first time since 2022, stoking worries that higher energy costs could slow global growth and reignite inflation. The US-Israeli war with Iran entered its second week with no resolution in sight, while US President Donald Trump demanded Tehran’s unconditional surrender. Copper also came under pressure from a rallying dollar, as investors flocked to the currency as a safe store of value and revised expectations on Federal Reserve policy due to renewed inflationary risks. In top consumer China, annual inflation jumped to a three-year high in February, partly driven by Lunar New Year holiday spending.

Copper decreased to 5.62 USD/Lbs, the lowest since December 2025. Over the past 4 weeks, Copper lost 5.51%, and in the last 12 months, it increased 22.07%.