Copper prices edged closer to record highs this week, driven by renewed optimism over an impending trade accord between the US and China and concerns about tightening global supply as major producers face output disruptions.
On the London Metal Exchange (LME), copper traded around US$11,029 a ton on Tuesday (October 28) roughly US$80 below the all-time high of US$11,104.50 set in May last year.
Copper futures on COMEX also climbed to as high as US$5.247 per pound, or roughly US$11,568 per metric ton, while currently settling at US$5.1395. This places them close to the record level of US$12,330 per ton reached in July.
Futures in New York also advanced as much as 2.4 percent earlier this week, buoyed by signs that Washington and Beijing are moving to ease trade tensions that have weighed on global growth.
Negotiators from both sides concluded talks over the weekend that appear to have set the stage for a sweeping agreement for Presidents Donald Trump and Xi Jinping to finalize later this week at a summit in South Korea.
US Treasury Secretary Scott Bessent confirmed that Trump’s threat of 100 percent tariffs is ‘off the table,’ and Beijing has agreed to pause for a year its plan to expand rare earth export controls.
Copper in general has rallied by about 25 percent this year, recovering from last year’s selloff triggered by escalating trade tensions. The rally has been amplified by a string of supply disruptions across key producing regions, from South America to Central Africa and Southeast Asia.
At the same time, the dollar’s weakness has given an additional lift to copper prices, making dollar-denominated commodities more attractive. The US currency has fallen more than 7 percent since January amid growing market expectations of further Federal Reserve rate cuts.
But while demand optimism is back, the supply picture remains fragile. Anglo American (LSE:AAL,OTCQX:NGLOY) warned this week that copper production from its flagship Collahuasi mine in Chile will likely fall short of expectations in 2026, further straining an already tight market.
Anglo had previously projected production to rise to as much as 470,000 tons from between 380,000 and 410,000 tons this year, but said it expects a recovery only by 2027.
In its latest quarterly results, Anglo also reported a 9 percent decline in copper output over the first nine months of the year, producing 526,000 tons compared with 575,000 tons in the same period of 2024.
Still, it maintained its full-year guidance of 690,000 to 750,000 tons of copper and raised its outlook for iron ore output after completing pipeline inspections at its Minas-Rio operation in Brazil ahead of schedule.
The company’s muti-billion merger with Canada’s Teck Resources (TSX:TECK.A,NYSE:TECK) last month continues a consolidation trend in the industry as producers seek to secure future copper supply driven mainly by the clean energy transition and the AI-driven data infrastructure boom.
Copper is essential for renewable energy systems, electric vehicles, and power grids, all of which are expanding rapidly. BHP, the world’s largest miner, estimates that global copper demand could surge by around 70 percent by 2050.
Analysts believe that if a formal US-China trade deal materializes this week, copper could test—or even surpass—its record highs set last year.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.