Copper Set for Second Monthly Gain

Copper futures held steady near $6.4 per pound on Friday and were on track to register a second straight monthly advance, underpinned by renewed optimism over demand linked to the global artificial intelligence expansion and the rapid build-out of data center infrastructure. Increasing copper consumption in global power networks amid the broader shift toward cleaner energy also continued to support the demand outlook. On the supply side, production constraints in top producer Chile prompted major refiners to scale back capacity and output. At the same time, rising copper imports into the United States ahead of potential tariff measures have added to concerns over tightening global availability. On the geopolitical front, reports that the United States and Iran reached a preliminary peace agreement helped ease concerns about supply disruptions, further shaping market sentiment.

Copper futures fell below $6.25 per pound on Thursday from the one-week high of $6.4 earlier in the week amid cautious optimism of resorted trade through the Persian Gulf. Iran claimed it has an unofficial draft on an agreement with the US that would halt their naval blockade on vessels exiting the Strait of Hormuz, although the claims were rejected by Washington. Still, the outlook of restated flows of sulfur and sulfuric acid from GCC economies, a major supply hub, improved expectations on that copper producers will regain access to inputs on the production process. The tight supply for the commodity, which is used by refiners through heap leaching and purifying copper to produce anodes, drove China to suspend exports. Consequently, the shortage in top copper producer Chile forced major refiners to cut capacity and lower supply. Meanwhile, supply from Codelco risked a pullback as the company is targeting roughly $2 billion in cost reductions.

Copper futures climbed to around $6.4 per pound on Wednesday, extending recent gains as markets cautiously priced in the possibility of a US-Iran peace agreement despite ongoing hostilities in the Middle East. President Donald Trump said negotiations to extend a ceasefire and reopen the Strait of Hormuz are still in progress, while US Secretary of State Marco Rubio cautioned that reaching a final deal could still take several days. Copper was also underpinned by the continued strength in AI-linked technology equities, which has reinforced expectations for stronger industrial demand driven by electrification trends and data center expansion, particularly in wiring and power infrastructure. On the supply side, lingering concerns tied to the Middle East conflict, including potential disruptions to sulfur availability used in copper smelting, added further support to prices.