Copper Soars to Records on Risk Fears, Weaker Dollar

Key Moments

Record Copper Prices in Shanghai and London

Copper extended its powerful rally on Thursday, reaching unprecedented levels in both Chinese and international markets as investors increased exposure to physical assets in response to geopolitical uncertainties and a soft dollar backdrop.

On the Shanghai Futures Exchange (SHFE), the most-active copper contract ended daytime trading up 6.71% at 109,110 yuan ($15,708.77) per metric ton. Earlier in the session, it had jumped 8.53%, setting a new all-time intraday high of 110,970 yuan per ton.

Benchmark three-month copper on the London Metal Exchange (LME) also advanced sharply, climbing 6.32% to $13,913.50 per ton as of 0700 GMT, after earlier spiking 7.94% to a record high of $14,125.

Year-to-Date Performance and Drivers

So far this year, the most-active SHFE copper contract has risen 9%, while the LME benchmark has gained more than 11%. These increases followed a record-setting rally in 2025, which was driven by concerns over supply disruptions at mines and regional dislocation linked to U.S. tariff threats.

Traders noted that copper has been drawing fresh interest as investors rotate from the strong gains previously seen in gold and silver.

Geopolitical Risk and Demand for Physical Assets

Thursday’s move in copper came in the wake of record highs in gold and silver, as market participants sought physical assets amid heightened geopolitical risk. The article reported that this flight to safety intensified after U.S. President Donald Trump on Wednesday threatened Iran with possible attacks if it did not strike a deal on nuclear weapons.

Impact of the U.S. Dollar and Federal Reserve Decision

The U.S. dollar steadied after the Federal Reserve left interest rates unchanged on Wednesday, but it continued to hover near recent lows. The weaker dollar provided additional support to commodities priced in the U.S. currency by making them relatively cheaper for holders of other currencies, thereby underpinning demand.

China Demand Signals and Yangshan Premium

The strength in copper prices emerged despite signs of subdued spot demand in China, the largest consumer market. The Yangshan copper premium – a key indicator of Chinese appetite for imported copper – fell to $20 per ton on Wednesday, its lowest level since July, 2024.

Broad-Based Gains Across Base Metals

The rally extended beyond copper, with other base metals on both SHFE and LME posting notable gains.

Aluminium and Other Base Metals Strengthen

Aluminium prices remained firm. On SHFE, the most-active aluminium contract closed 2.92% higher at 25,590 yuan per ton, while the corresponding LME benchmark gained 1.30% to reach $3,299.50.

Other SHFE-traded base metals also advanced: zinc climbed 2.91%, lead rose 1.09%, nickel increased 1.79%, and tin edged up 0.28%.

On the LME, zinc surged 2.91%, lead added 1.44%, nickel rose 2.49%, and tin gained 1.07%.

Currency Reference

The article cited an exchange rate of $1 = 6.9458 Chinese yuan renminbi.