Copper Climbs To New Heights on Asian Demand Boom

Copper prices shattered records on Wednesday, climbing as much as 2.4% to surpass $11,400 per metric ton on the London Metal Exchange (LME), fueled by an unprecedented surge in withdrawal orders from Asian warehouses that signals tightening physical supply. By mid-morning London time, the three-month copper contract had settled up 2.3% at $11,400.50 per ton, extending a blistering 30% year-to-date rally and eclipsing Monday's previous high. The spike reflects escalating global demand pressures amid supply vulnerabilities, with traders scrambling to secure metal ahead of potential U.S. import tariffs and ongoing disruptions in key mining regions.

LME data revealed withdrawal requests from warehouses in Taiwan and South Korea—the largest since 2013—indicating aggressive restocking by Asian buyers, particularly in electronics and manufacturing hubs where copper is essential for wiring and components. This physical tightness contrasts with earlier surpluses, as refined copper output growth slows to just 0.9% in 2026 due to concentrate shortages, according to the International Copper Study Group. Chinese smelters, facing negative treatment charges for the first time, are curtailing production, while U.S. traders have diverted massive volumes to preempt 50% tariffs proposed by the Trump administration, further straining global availability.

The rally builds on a year of volatility, with copper hitting $5.81 per pound ($12,810 per ton) on COMEX in Q3 amid tariff fears and energy transition demands from electric vehicles, renewables, and data centers. Disruptions at major mines in Indonesia, Chile's El Teniente, and the Democratic Republic of Congo have slashed 2025 production forecasts to 1.4% growth, tipping the market from a 178,000-ton surplus this year to a 150,000-ton deficit next. Analysts at J.P. Morgan note the surge—over 20% since January—stems from these imbalances, amplified by a weakening U.S. dollar and Federal Reserve rate-cut expectations.

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Broader base metals followed suit, with aluminum up 0.9% and zinc rising 0.8%, as investors eye U.S. economic indicators this week, including private payrolls and industrial output data that could influence Fed policy. Chinese demand, projected to grow 3.3% in 2025 before moderating, remains a wildcard amid spot trading freezes at record highs.

Looking ahead, experts like those at IFC foresee high-level consolidation in December, with supply constraints limiting downside but macro risks capping explosive gains. Forecasts from Discovery Alert suggest prices could test $20,000 per ton if electrification accelerates, positioning copper as a bellwether for global green investments despite short-term tariff uncertainties.

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