Copper prices reached unprecedented levels on Thursday, triggering a significant rally in the metals market. This surge is fueled by growing investor appetite for physical assets amidst escalating geopolitical tensions and a depreciation of the U.S. dollar.
On the Shanghai Futures Exchange, the leading copper contract soared 6.35% to 108,740 yuan ($15,652.12) per metric ton early Thursday, with an intraday peak at 109,570 yuan per ton. Concurrently, on the London Metal Exchange, the three-month copper contract increased by 6.63% to $13,953.50 per ton, achieving a historic high of $13,967.
In 2026 alone, copper prices in Shanghai have risen nearly 9%, while London’s prices have grown over 11%, building on last year’s remarkable gains. These substantial increases are attributed to ongoing supply issues, including mine closures and regional challenges exacerbated by trade disputes and U.S. tariff threats.
Market analysts note a noticeable shift from gold and silver investments towards copper, driven by heightened demand for tangible commodities amid global uncertainty. This trend follows recent geopolitical escalations, particularly increased tensions between the U.S. and Iran over nuclear talks.
The U.S. dollar showed some stabilization after the Federal Reserve opted to keep interest rates unchanged, yet it remains close to recent lows. A weaker dollar typically enhances demand for dollar-denominated commodities by making them cheaper for international purchasers.
Despite the bullish price trend, current spot demand in China—the world’s largest copper consumer—has slackened. The Yangshan copper premium, a significant measure of Chinese import demand, has dropped to $20 per ton, marking its lowest level since July 2024.
Other base metals have also seen gains: aluminum rose by 3.08% on the Shanghai exchange and 1.87% in London. Zinc, lead, nickel, and tin followed suit with considerable increases across both markets.
This metals rally underscores the intricate relationship between geopolitical risks, currency fluctuations, and supply challenges, demonstrating continued investor confidence in base metals as reliable assets during uncertain times.
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