Copper Nears Record on US–China Trade Optimism, Dollar Steady

Copper rallies on trade hopes, sits just below 2024 peak

Copper prices traded near record territory after upbeat signals around US–China trade talks improved risk appetite. Investing.com reported three-month LME copper around $10,900–$10,960 a metric ton on Monday, within sight of the May 2024 record at $11,104.50. The article framed the move as a response to a positive tone ahead of a leaders’ meeting later this week, with futures gains echoing across exchanges. Market focus now turns to whether policy headlines can sustain demand while supply remains constrained.

What the tape says

Market chatter from banks and trading desks points to copper holding firm even as the dollar stays broadly steady, a backdrop that typically tempers momentum. Price action also tracks earlier analysis noting that benchmark copper had pushed above $10,600 recently, powered by supply issues and a softer dollar earlier in the quarter. The combination has left prices close to the psychological $11,000 mark several times in recent weeks.

The record to beat, and why it matters

The 2024 LME record at $11,104.50 is the key line for technicians and risk managers. Clearing it with conviction would validate the view that structural tightness, mine disruptions, and policy catalysts can overpower cyclical worries. Investing.com highlighted that Monday’s level was just shy of that high, reinforcing the risk that a further nudge from macro headlines could push copper to new records.

Supply constraints remain the bull case

The International Copper Study Group has cut its 2025 mine growth outlook, adding to a year of disruptions that supported prices. Analysts at major banks see little near-term relief, arguing that project delays and permitting hurdles constrain additions to supply. These signals have underpinned strength during periods of softer demand data, helping copper stay near record levels as traders weigh the balance between limited output and a possible demand uplift from trade de-escalation.

The US–China angle

Optimism around an outline for talks between Washington and Beijing has improved sentiment across commodities tied to industrial activity. Other coverage noted that copper’s latest rise coincided with a positive tone from both sides, which tends to lift equities in Asia and reduce the need for defensive positioning. If talks advance into concrete steps that reduce uncertainty, manufacturers could restore orders that were delayed by tariff and supply chain risks, supporting spot premiums and forward spreads.

Dollar steady, Fed in view

The dollar has been broadly steady into the Federal Reserve meeting, a factor that can slow copper’s ascent since the metal is priced in dollars. Traders will parse guidance on the pace of rate cuts and balance-sheet operations. A patient Fed that keeps real yields firm would cap commodity momentum; a more accommodative tone would lower the opportunity cost of holding raw materials and could lift copper toward the record. Either way, with copper near record and the dollar steady, positioning around event risk matters. (Macro setup synthesized from current market reporting.)

US–Europe price dynamics and tariffs

Earlier this year, price differentials between US Comex and LME copper widened amid tariff policy shifts and stocking by US buyers. Premiums have since fluctuated, but the episode underscored how policy can reshape flows and regional spreads even when global balances are tight. Strategists continue to monitor whether any new measures emerge from Washington or Beijing that could alter import costs, physical premia, or hedging behavior.

Inventories, spreads, and the micro picture

Inventories tracked by exchanges remain sensitive to week-to-week flows. Prior updates showed notable drawdowns on Asian exchanges and a general tightening trend across key hubs. When stocks fall while nearby spreads strengthen, the signal is usually consistent with a tight physical market, particularly if cancellations rise. If trade optimism converts into firmer factory activity, those trends could accelerate into year-end.

What miners and manufacturers will watch

Producers will watch whether current prices unlock financing for stalled projects and whether smelter treatment charges hold at levels that keep concentrate moving. Fabricators will focus on order books, cable and transformer demand, and the ability to pass higher costs through to end users. Automakers and grid developers remain the medium-term demand pillars; their procurement cycles can magnify moves when prices test records. Commentary from trading houses earlier this year argued that $12,000 is plausible on sustained tightness.

Risk factors that could cool the rally

Three risks could stall momentum. First, a hawkish surprise from the Fed that boosts the dollar. Second, a setback in US–China talks that revives tariff uncertainty and delays orders. Third, better-than-expected mine output or a quick rebuild in inventories. Conversely, a clean path to de-escalation and further supply disappointments would keep copper near record or push it through the $11,104.50 threshold.