Copper Slips on Profit-Taking

Copper futures eased to around $6.66 per pound on Wednesday, retreating from record levels as traders took profits while reassessing market fundamentals. The metal had surged to fresh all-time highs earlier this week amid tariff uncertainty and tightening global supply. The persistent premium for copper futures on New York’s Comex continued to offer arbitrage opportunities, even as the White House has yet to decide on proposed tariffs for the metal. Meanwhile, major copper-producing nations in South America have encountered operational difficulties this year, weighing on production and exports. Supply has also struggled to keep up with growing demand from data centers, renewable energy projects and electricity grids. In China, demand is expected to strengthen as the market enters the traditional peak season for manufacturing activity.

Copper futures climbed to around $6.7 per pound on Tuesday, nearing fresh record highs as expectations of new US import tariffs on the metal continued to encourage traders to redirect shipments toward US warehouses, tightening supplies elsewhere. The persistent premium on copper futures traded on New York’s Comex continued to create arbitrage opportunities, even as the White House has yet to finalize the proposed levies. The tariff-driven trade triggered a major squeeze and backwardation on the LME last month, although new deliveries have helped ease some of the immediate supply pressure. Major copper-producing countries in South America have also faced operational challenges this year, contributing to weaker output and exports. Meanwhile, supply has struggled to keep pace with rising demand from data centers, renewable energy projects and power grids.

Copper futures in the US were above $6.6 per pound on Monday, hovering close to the record-high of $6.7 that was tested late August on mounting concerns to supply. The escalation of strikes between the US and Iran prolonged the suspension of usual commercial vessel flows through the Strait of Hormuz. This worsened ongoing shortages of sulfuric acid for refiners in key South American hubs, as supply pressures from GCC countries drove China to halt their exports. This was magnified by lingering concerns that the US presidential administration is could impose tariffs on unprocessed copper goods triggered a surge in buying to front-load deliveries. Consequently, backwardation curves steepened both in major Western copper exchanges. Mined supply has also faltered with reports from Codelco and Freeport-McMoRan posting double digit declines in production, shortly after the International Copper Study Group pointed to a 1.1% decline in global production in the first half of the year.