Copper hit record highs on Monday due to concerns about future shortages and China’s pledge to boost domestic demand next year. However, a stronger dollar following the start of U.S. trading led to a retreat in prices.
Benchmark copper on the London Metal Exchange remained nearly unchanged at $11,622 per metric ton at 1702 GMT, down from an earlier peak of $11,771 per ton, representing a 30% gain this year.
Analysts expect the U.S. Federal Reserve to implement a “hawkish cut” this week. The language of the statement and Chair Jerome Powell’s press conference are anticipated to indicate a higher threshold for further rate cuts.
This is expected to support the U.S. dollar, which, when it rises, makes dollar-priced metals more expensive for holders of other currencies.
Traders noted China’s announcement to expand domestic demand and support the broader economy with more proactive policies in 2026 as a positive for industrial metals.
Expectations of copper market deficits are partly due to mine supply disruptions in recent years, including an accident at Freeport McMoRan’s giant Grasberg mine in Indonesia.
Supplies have also tightened globally as traders have been shipping copper to the United States since March due to higher prices on Comex, ahead of U.S. President Donald Trump’s planned import tariffs.
Refined copper was eventually exempted from the 50% import tariffs effective August 1, but U.S. duties on the metal used in the power and construction industries remain under review, with an update expected by June.
Copper inventories in Comex-approved warehouses reached a record high at 436,853 short tons or 396,306 metric tons on Friday, increasing more than 300% since March.
Analysts at Macquarie estimate there is approximately another 335,000 tons sitting off-exchange in the U.S.
“This is lower than our prior estimate of around 420kt due to more metal having transferred to Comex warehouses and November imports being lower than the usual pre-Section 232 level,” Macquarie stated.
“Allowing for some of this to be the transfer of existing stocks, it points towards a market surplus of 400,000 to 600,000 tons year to date. The issue is that most of this is in the U.S., creating an artificial tightness elsewhere.”
In other metals, aluminium fell 0.4% to $2,886 a ton, zinc gained 0.6% to $3,117, lead was down 0.2% to $1,997, tin slipped 0.5% to $39,850, and nickel ceded 0.5% to $14,865.
