Copper's upward momentum has regained strength. Supply-side tightness, shifting global metal flows due to potential US import tariffs, and melting stocks in China drove prices to their highest level in two weeks. However, weak manufacturing data from China remains the main factor limiting the pace of gains.
Demand for the industrial metal is not driven solely by short-term purchases. The expansion of power grids, artificial intelligence data centers, renewable energy projects, and rising electric vehicle production are among the key factors supporting copper's long-term outlook.
Copper hits two-week high
On the first trading day of the week, copper futures approached $6.50 per pound, reaching a two-week high. The metal gained about 1% on the day, rising over 5% in the past month and pushing its annual gain above 46%.
Three-month copper contracts on the London Metal Exchange traded around $13,800 per ton. Cash prices exceeding futures prices indicate that short-term demand for physical copper remains strong.
Distance to record narrows
Copper hit an all-time high of $6.67 per pound in June. The gap between current prices and that record has narrowed to below 3%. This market movement shows that pricing is not only influenced by expectations regarding China's economy. Changes in global stock distribution and potential US tariffs are also among the key factors determining price direction.
Throughout the year, copper has seen volatile trading, with every pullback met by renewed buying from physical buyers. Low inventory levels also stand out as a significant factor supporting these purchases. The critical threshold markets need to surpass for a new record high is seen at $6.67.
However, a sustained break above this level will depend on strengthening Chinese demand and an improving global industrial outlook.
Copper stocks in China drop sharply
Stocks in China, the world's largest copper consumer, have declined markedly in recent months. According to Shanghai Futures Exchange data, inventories that exceeded 433,000 tons in March fell below 70,000 tons by the end of July. The roughly 84% drop indicates a significant tightening of domestic supply. Maintenance at smelters has limited refined copper production, while issues in scrap copper supply are also among the factors squeezing availability. The Yangshan premium, which China pays for imported copper, rose from $59 per ton in June to $115, reaching its highest level in four years. This points to strengthening import demand.
US tariffs reshape global metal flows
The other major source of imbalance in the copper market is the United States. Uncertainty over potential tariffs on refined copper imports by the Washington administration has caused a significant portion of global shipments to be diverted to US warehouses. Copper futures prices in the US trading above London prices also encourage trading firms to send metal to the American market. In 2025, US refined copper imports surged 80% to 1.64 million tons. In the first five months of 2026, imports rose 13% compared to the same period last year. Today, American warehouses hold about 58% of copper stocks registered on global exchanges. This concentration makes it harder for users in Europe and Asia to access the metal.
Available copper in London warehouses declines
Shipments heading to the US and China's renewed focus on imports have also led to a decline in stocks at London Metal Exchange warehouses. LME inventories, which exceeded 400,000 tons in May, fell below 250,000 tons by the end of July. Because a significant portion of stocks is earmarked for delivery, the amount of copper immediately available to the market is well below the reported totals. Cash prices rising above three-month futures also indicate that supply tightness persists.
Weak manufacturing data caps gains
While the supply-side picture remains strong, some risks persist on the demand front. China's private sector manufacturing index recorded its slowest growth in four months in July. The slowdown in output and new orders is weighing on short-term demand expectations for industrial metals. Beijing's continuation of existing economic policies rather than introducing new, comprehensive stimulus also limits strong demand expectations. Weakness in the housing sector, in particular, negatively affects traditional copper consumption areas such as construction and white goods, while investments in energy infrastructure and power grids partially offset this loss.
AI and energy transition support demand
Artificial intelligence investments are playing an increasingly important role in copper's long-term outlook. High-capacity data centers consume large amounts of copper for cabling, transformers, cooling systems, and electrical infrastructure. Alongside rising electric vehicle production, renewable energy plants and energy storage projects are also among the main areas supporting metal demand. However, high prices may encourage producers to turn to alternative metals like aluminum or postpone some investments. Therefore, copper's ability to sustain levels above record highs will depend not only on supply tightness but also on the extent to which consumers can absorb high costs. In the short term, markets are focused on the US tariff decision, stock developments in China, and manufacturing data. For copper to surpass the $6.67 record high, supply-driven tightness will need to outweigh the demand-side slowdown.
