US copper futures traded above $6.60 per pound on Monday, hovering near the record high of $6.70 reached in late August amid escalating supply concerns. Intensifying strikes between the US and Iran have further disrupted normal commercial shipping through the Strait of Hormuz, exacerbating existing shortages of sulfuric acid for refiners in key South American hubs. At the same time, tighter supply from GCC producers has prompted China to halt its exports, amplifying the squeeze on the market.
These developments have been compounded by persistent worries that the US administration could introduce tariffs on unprocessed copper products, prompting buyers to accelerate orders and front-load deliveries. As a result, backwardation in copper futures has deepened across the major Western exchanges.
On the mined supply side, conditions have also deteriorated. Both Codelco and Freeport-McMoRan have reported double-digit declines in output, shortly after the International Copper Study Group estimated that global production fell by 1.1% in the first half of the year.
