Copper Supported by Chinese Restocking

Copper futures climbed back above $6 per pound on Wednesday, rebounding from the previous session’s losses as restocking activity in China picked up ahead of the Labor Day holiday from May 1 to 5. Official data also showed Chinese smelters produced a record volume of refined copper in March, as elevated prices for byproduct sulfuric acid boosted output and improved industry margins. Production rose to 1.33 million tons, the highest level in data dating back to 1990. However, copper output is expected to ease in April and the following month due to seasonal maintenance at smelters, with the bulk of the impact likely to be felt in May. Elsewhere, Australian mining giant Rio Tinto reported a 9% increase in first-quarter copper production, driven by ramped-up operations at the Oyu Tolgoi mine in Mongolia.

Copper futures slipped below $6 per pound on Tuesday, remaining under pressure as investors stayed cautious ahead of further US-Iran peace negotiations. Both sides are expected to send delegations to Islamabad for a second round of talks before the current ceasefire expires, although President Donald Trump said he is unlikely to extend the truce and that the Strait of Hormuz will remain blocked until a deal is finalized. Continued disruption in the key shipping route has intensified the energy shock, lifting inflation and growth risks, with spillovers into manufacturing and broader industrial metal demand. Despite near-term weakness, copper remains underpinned by longer-term structural support from global electrification trends, artificial intelligence expansion, and steady demand from power grid upgrades and construction activity. On the supply side, output remains constrained by mining disruptions, persistent underinvestment, and extended timelines for new project development.

Copper futures dropped below $6.1 per pound on Monday, pulling back from more than two-month highs as escalating US-Iran tensions stoked inflation and growth concerns that could weigh on demand for industrial metals. The US seized an Iranian-flagged cargo vessel in the Gulf of Oman, while Tehran reversed plans to reopen the Strait of Hormuz and said it would not take part in a second round of negotiations. Prolonged disruption in the strategic waterway has intensified the energy shock, raising inflation risks and threatening global economic growth, with knock-on effects for manufacturing and broader industrial commodity demand. Beyond near-term trade pressures, copper remains supported by structural drivers including global electrification, artificial intelligence adoption, and steady consumption from power grids and construction activity. On the supply side, output continues to be constrained by mining disruptions, chronic underinvestment, and long lead times for new projects.