Copper Prices Near Record High Amid Global Supply Constraints, Aluminum Markets See Significant Gains

Copper Prices Surge Above $14,000 a Ton as Supply Risks Mount

Copper prices extended gains above $14,000 a ton on the London Metal Exchange, inching closer to a record set in late January. The red metal rallied for an eighth consecutive session, touching $14,196.50 a ton. This is close to its all-time high of $14,527.50. The surge in copper prices is attributed to supply risks from mine disruptions around the world, particularly in Africa, where a squeeze on Middle Eastern sulfur supplies has threatened the production outlook for some mines.

Sulfur is used in processing approximately one-sixth of global copper. The combination of supply issues and resilient demand is driving a notable recovery in industrial metals, according to Li Xuezhi, head of research at Chaos Ternary Futures Co. Copper futures on New York's Comex jumped to a record $6.716 a pound, widening their premium over LME copper to more than $500 a ton. This is amid expectations that the US will impose tariffs on refined metal imports, which are luring refined copper into the US and draining supplies elsewhere.

The US Commerce Secretary is due to deliver an updated report on the domestic copper market by June 30, as part of a broader push to bolster supplies of a metal critical to global electrification. Meanwhile, in China, worsening raw material shortages at mines have started to affect refined metal output. Refined copper output stood at 1.05 million tons in April, down 3% from March, after concentrate treatment charges plunged further and invoicing restrictions tightened scrap supply as feedstock, according to Beijing Antaike Information Co. Production may drop further in May due to smelter maintenance, the firm said.

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Aluminum surged to its highest level since March 2022, helped by a surge in withdrawals from LME warehouses, which is often seen as a last-resort source of supply, pointing to tightening conditions in the physical market. Copper rose 0.8% to $14,140.00 a metric ton on the LME as of 12:22 p.m. in New York. Aluminum gained 2.9% to $3,667.00. All other base metals advanced.