Copper hovers below record high as non-US supply tightness remains in focus

Copper dipped below its record high on Wednesday as inventories continued to build in the United States ahead of a possible tariff on refined copper imports, tightening availability elsewhere.

Benchmark three-month copper on the London Metal Exchange fell 0.55% to $14,628 a metric ton by 0245 GMT, after touching an all-time high of $14,779 on Tuesday.

The most-traded copper contract on the Shanghai Futures Exchange rose 0.44% to 110,740 yuan ($16,509.38) a ton.

COMEX copper inventories continued to climb, reaching 797,275 short tons, or 723,275 metric tons as of Tuesday.

Some analysts now expect copper prices to touch the $15,000 level for the first time as soon as this week.

“The rally looks increasingly policy-driven,” ING said in a note on Wednesday, adding that prices could correct sharply if tariffs are delayed or ruled out while demand remains subdued.

On Tuesday, senior metals analyst Natalie Scott-Gray at brokerage StoneX estimated more than 1.2 million metric tons of copper have entered the US since Washington launched its Section 232 investigation into copper in February last year, leaving available material outside the country at “historically low levels”.

Investor positioning has also become stretched.

Scott-Gray added COMEX managed-money long positions have reached near five-year highs.

COMEX copper rose 2.11% on Tuesday and has been trending higher since July.

In China, the world’s biggest copper consumer, factory-gate inflation accelerated in August, lifted by rising energy costs, but underlying domestic demand remained subdued.

Producer prices rose 3.8% from a year earlier, up from 3.5% in July, while consumer inflation quickened to 0.8% from 0.5%.

Among other LME metals, aluminium fell 0.25%, zinc dropped 0.56%, lead slipped 0.16%, nickel declined 1.08% and tin eased 0.11%.

On SHFE, aluminium rose 0.49%, zinc added 0.04% and lead gained 0.50%, while nickel fell 0.23% and tin dropped 0.32%.