Copper Nears Record High on Tight Global Supply; Aluminum Surges
Copper extended gains above $14,000 a ton, inching toward a record set in late January, as supply risks mount from mine disruptions around the world. Aluminum surged to the highest in more than four years.
(Bloomberg) -- Copper extended gains above $14,000 a ton, inching toward a record set in late January, as supply risks mount from mine disruptions around the world. Aluminum surged to the highest in more than four years.
The red metal rallied for an eighth session to touch $14,196.50 a ton on the London Metal Exchange, close to its all-time high of $14,527.50.
A squeeze on Middle Eastern sulfur supplies has threatened the production outlook for some mines in Africa, compounding existing disruptions at other major sites around the world. Sulfur is used in processing about a sixth of global copper.
Quick answers to key questions
Copper is nearing a record high due to mounting supply risks stemming from global mine disruptions and a squeeze on Middle Eastern sulfur supplies. These factors, combined with resilient demand, are driving up prices.
Aluminum prices have surged due to a significant increase in withdrawals from LME warehouses, indicating tightening conditions in the physical market. This suggests that available supply is decreasing.
Anticipation of US tariffs on refined metal imports is causing copper futures on the New York Comex to jump. This is luring refined copper into the US and draining supplies elsewhere, widening the premium over LME copper.
Refined copper output in China is being affected by worsening raw material shortages at mines, a plunge in concentrate treatment charges, and tightened scrap supply. Smelter maintenance is also expected to further reduce production.
India's decision to raise import duties on gold, silver, and other precious metals is expected to increase the landed cost of imported bullion. This could lead to higher domestic prices and potentially impact demand in price-sensitive market segments.
The slew of supply issues, combined with 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 amid expectations the US will impose tariffs on refined metal imports. The potential duties 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, 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.
Aluminum climbed to its highest level since March 2022, helped by a surge in withdrawals from LME warehouses — 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.
--With assistance from Jack Ryan.
More stories like this are available on bloomberg.com
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