Copper futures traded at $6.50 per pound on Wednesday, holding most of their retreat from the record high of $6.70 reached on August 25th, as macroeconomic headwinds temporarily offset the impact of tightening supply. Long-term bond yields climbed as energy prices rebounded and markets focused on widening public deficits, weighing on the outlook for broad manufacturing activity and pressuring base metal prices lower.
At the same time, renewed escalation of the war in the Middle East continued to strain the global supply of sulfuric acid, leading to shortages of this key input for copper refiners. These supply concerns were compounded by lingering fears that the US presidential administration could impose tariffs on unprocessed copper products, prompting buyers to front-load purchases. As a result, backwardation steepened across major Western copper exchanges.
