Copper Marches Toward Record Highs

Copper futures fell below $5.8 per pound on Thursday, extending losses from the previous session, pressured by a stronger dollar as rising oil prices reignited inflation concerns. Oil climbed for a second day as the prospect of a protracted Iran war overshadowed a coordinated release of oil reserves by major economies. Forward-looking inflationary risks dampened expectations for Federal Reserve rate cuts, with forecasts pointing to only one reduction later this year, bolstering the dollar. On the trade front, the Trump administration launched new investigations into China, the EU, and other economies, aimed at replacing President Donald Trump’s reciprocal tariffs recently struck down by the Supreme Court. Meanwhile, opportunistic dip-buying by Chinese fabricators provided some support, driven by demand from the construction and renewable energy sectors.

Copper traded just below $5.9 per pound on Wednesday after rising for three straight sessions, supported by opportunistic dip-buying from Chinese fabricators taking advantage of lower prices. Spot premiums have been climbing in China as the recent drop in prices triggered a wave of downstream procurement from the construction and renewable energy sectors. Market participants also focused on mounting midstream pressure, with annual copper smelting refining charges plunging to $0 per ton 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 rising defense spending continues to underpin the red metal. Separately, workers at Glencore’s Australian copper refinery threatened to strike after failing to reach an agreement in a pay dispute.

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.