Copper Prices Surge Toward Historic High Amid Global Supply Constraints

Copper Prices Inch Toward Record High Amid Mounting Supply Risks

Copper extended its gains above $14,000 a ton, nearing a record high seen earlier this year, as supply risks escalate due to mine disruptions around the world. The red metal rallied for an eighth consecutive session, touching $14,196.50 a ton on the London Metal Exchange, close to an all-time high of $14,527.50 in January.

A squeeze on Middle Eastern supplies of sulfur has threatened the production outlook for some mines in Africa, compounding existing disruptions at other major sites worldwide. However, copper demand remains resilient, largely driven by China, the world's biggest user, which has seen robust consumption from power grids, renewable energy, and artificial intelligence sectors.

The combination of supply issues and solid demand is leading industrial metals to recover notably, with worries over the Iran war easing. According to Li Xuezhi, head of research at Chaos Ternary Futures Co., the slew of supply issues is contributing to the recovery.

Read also: Gold and Silver Prices Decline Amid Strengthening Dollar and Inflation Concerns

Copper futures on New York's Comex jumped to a record $6.69 a pound, widening their premium to LME copper above $500 a ton in anticipation of the US imposing tariffs on refined metal imports. The potential duties have the effect of luring refined copper into the US, draining supplies elsewhere.

The US Commerce Secretary is due to deliver an updated report on the domestic copper market by June 30, part of a broader push to bolster supplies of a metal critical to growing electrification around the world. 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 supply of scrap as feedstock, according to Beijing Antaike Information Co. Production may drop further in May due to maintenance at smelters, it added.

Read also: Gold and Silver Prices in India: A Review of Current Rates Across Major Cities

As of 11:06 a.m. in Shanghai, copper rose 0.5% to $14,099 a ton, while other base metals also gained, with aluminum up 0.3% to $3,574 a ton and tin climbing 0.5% to $55,070.