Copper climbs to five-month high after delay to LME opening

Copper climbs to five-month high after delay to LME opening

Copper prices hit their highest level in more than five months, trading around $9,882 per ton on the London Metal Exchange (LME) on September 2, 2025 [1]. This uptick was driven by a combination of factors, including a weaker U.S. dollar, upbeat Chinese manufacturing data, and ongoing demand for the metal in key sectors like construction and electrification.

The LME copper price, which had been hovering just under the $10,000 per ton mark, saw a slight pullback to $9,882 per ton after three-month contracts dipped fractionally. This move was largely attributed to a temporary delay in the LME opening, which temporarily disrupted trading activities [2]. However, the underlying drivers of copper's resilience remained intact, with Chinese demand continuing to support prices.

The Chinese manufacturing sector showed strong growth in August, with factory activity expanding at the fastest pace in five months, according to a private sector survey [2]. This positive data, coupled with a weaker dollar, provided a boost to copper prices. The dollar index climbed 0.2% to 97.873, putting pressure on commodities, but copper's dip remained shallow due to the robust demand from China [1].

Despite short-term hesitations linked to trade war concerns and a firmer U.S. dollar, copper remains supported by steady Chinese demand, institutional accumulation, and tightening long-term supply prospects. China accounts for over 50% of global copper consumption, with visible demand rising nearly 10% year-over-year in H1 2025, according to Zijin Mining Group [1].

Technically, copper's breakout above its four-week consolidation phase in late August pushed LME contracts to $9,928 per ton, marking the start of a new uptrend that is still technically intact [1]. Resistance remains firm at $10,200–$10,300 per ton, where selling has capped upside multiple times this year. On the downside, immediate support sits near $9,700, a level highlighted in late August forecasts, with a deeper floor at $9,300 if profit-taking accelerates [1].

In the European scrap market, Chinese imports of European copper scrap rose 3.5% year-over-year in the first seven months of 2025, totaling more than 204,000 tons, creating severe shortages for German and EU smelters [1]. This scarcity of scrap supply could further tighten European manufacturing chains, particularly in automotive and electrical equipment.

The supply gap looms large over copper's medium-term outlook. Average ore grades have fallen from 1.6% in 1900 to just 0.6% today, raising extraction costs and slowing output growth. Chile’s Codelco, the world’s largest producer, continues to struggle with higher costs from deeper mining, while new large-scale projects face 15–20 year development timelines [1].

In the U.S., copper has become a central driver of rising construction costs. National building costs climbed 2.7% in Q2 and 5.4% year-over-year, with Milwaukee posting a sharper 4.5% quarterly increase. Copper pipe prices rose 20% over two years, while copper wire added 10%, contributing to a 6.7% YoY construction cost spike in the region [1].

Investors are drawn to copper producers and project developers, with companies like Axo Copper, Nicola Mining, and American West Metals advancing exploration in anticipation of a market squeeze [1]. Jiangxi Copper, a dominant player in China's copper refining sector, reported a 19.78% year-on-year increase in profit attributable to shareholders in H1 2025, underscoring the company's operational resilience amid a challenging trading environment [3].

In conclusion, copper prices climbed to their highest level in five months, driven by a weaker dollar, strong Chinese demand, and ongoing demand from key sectors like construction and electrification. While short-term volatility persists, the long-term fundamentals of copper remain robust, positioning it as a core industrial metal play heading into 2026.

References:
[1] https://www.tradingnews.com/news/copper-price-forecast-hg-f-struggles-at-9882-usd
[2] https://www.brecorder.com/news/40380745/copper-hits-one-month-on-strong-china-factory-data-weak-dollar
[3] https://www.ainvest.com/news/jiangxi-copper-strong-h1-profit-growth-strategic-buy-industrial-metals-exposure-2508-90/