Copper prices approach historical highs as trade easing and supply disruptions drive the market higher.

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Global trade easing injects new momentum into copper's price rally.

On October 27, according to CCTV News, Chinese Foreign Ministry spokesperson Guo Jiakun stated that guided by the important consensus reached by the two countries' leaders, both sides in the U.S.-China economic and trade consultations have conducted frank, in-depth, and constructive exchanges and consultations on key economic and trade issues of mutual concern, reaching a basic consensus on arrangements to address each other's concerns.

Previously, disruptions to mine production from South America to Indonesia intensified market concerns about supply. On Monday, copper prices on the London Metal Exchange once rose 1.2% to $11,094 per ton, less than $10 away from the all-time high set in May 2024, before narrowing slightly.

(London copper once rose to $11,094 per ton)

Supply disruptions combined with a weak dollar push up copper prices

In recent months, a series of major mining accidents has repeatedly driven up copper prices. WallstreetCN has noted:

In May, Ivanhoe Mines' Kamoa-Kakula mine in the Democratic Republic of Congo repeatedly suspended work due to seismic activity and withdrew its 2025 guidance related to the mine.In August, a rock burst occurred at the largest mine of Codelco, Chile's state copper company.In September, a fatal large-scale mudslide occurred at Freeport McMoRan's Grasberg mine in Indonesia. Following the accident, the company lowered its copper sales forecast for the giant mine.

Analysts believe these production disruptions have to some extent triggered market concerns about future supply.

In the long term, the outlook for copper demand remains strong, providing structural support for copper prices. The world's largest mining company, BHP Group, predicts that global copper demand will grow by about 70% by 2050.

Copper, as a key material for wires, batteries, and pipes, plays an indispensable role in global electrification.

With many uncertainties on the supply side, this strong long-term demand outlook makes the copper market's supply-demand balance especially fragile, and explains why prices are so sensitive to various disruptive information.

In addition to supply and demand factors, the decline of the dollar this year has also created a favorable environment for copper price rises.

Since January 2025, the U.S. Dollar Index has fallen by nearly 9%, as investors bet the Federal Reserve will further cut interest rates.

(The dollar index has fallen 9% this year)

The depreciation of the dollar makes dollar-denominated commodities more attractive to buyers holding other currencies. Meanwhile, expectations that rate cuts will stimulate economic growth have also boosted the raw materials market.

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