Commodities: Copper
Copper (Cu) has fallen more than 6% from last week’s record high as two developments cooled the trade. Reuters reported the White House has yet to decide on tariffs for refined copper imports, a key driver of the recent rally, with more than 200,000 tonnes reportedly stockpiled in the US ahead of their potential introduction.
Copper (Cu) has been hit with a powerful Muhammad Ali like one-two in recent sessions:
Copper stocks are increasingly caught in the AI-slowdown crossfire as they’ve evolved from a pure commodity trade into an AI-infrastructure trade. The copper bull case has been increasingly underpinned by expectations of enormous demand from data centres, power grids and electrification, helping drive strong gains across miners such as BHP and Sandfire. Consequently, any suggestion that hyperscalers could slow their AI build-out naturally raises questions over the timing of that incremental demand and gives investors another reason to take profits after a powerful run.
Copper (Cu) was very much in focus last week, hitting new all-time highs before reversing sharply – the industrial metal challenged our long term US$15,000 upside target. Cu ultimately ended the week lower after a brutal end to the week – COMEX copper ultimately finished the week at US$6.47/lb, down 1.9%, around 5% below Wednesday’s record high.
Hi MM,
Copper was smacked over 4% in European trade after Reuters reported that the White House had not yet made a decision on refined copper tariffs, citing concerns that higher prices would raise manufacturing costs. The fall was then compounded by the news around Iran, oil prices and bond yields, with the industrial metal ultimately closing down more than 5%.
Copper is trading around all-time highs at the moment, and overnight we saw some catch-up by US names after no trading on Monday night so we’re likely to see positive sentiment spilling over to local ASX-copper stocks today. So far, there is no obvious divergence between the commodity and equity prices that would caution us that the current leg up is starting to lose momentum.
Copper posted new all-time highs in London trade overnight, with three-month LME futures breaking above US$14,500/MT, breaking above January’s previous record. The latest leg higher has been fuelled by expectations that President Trump could extend US tariffs to refined copper imports, encouraging traders to divert large volumes of metal into the US and tightening availability elsewhere.
We covered BHP’s strong FY26 result here; since then, despite the advance in copper and iron ore, the “Big Australia” is basically unchanged, considering it’s $1.38c fully franked dividend last week. BHP has evolved into more of a copper company, as opposed to iron ore, over the last few years, but despite both commodities advancing, the recent rally has been significant, pushing our prevailing weights in both the Growth & Income Portfolio’s well above target.
Copper (Cu) ground higher last week closing within 1% of its high but as mentioned earlier we did see some profit taking creep into the high-flying Cu miners. The combination of constrained mine supply, falling inventories and powerful structural demand provides a supportive medium-term backdrop for the industrial metal, although after a more than +40% rally over the past year, the market is increasingly vulnerable to bouts of volatility around Chinese economic data and US interest-rate expectations.
