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| Copper |
Sanctions on Russian Aluminum and Uncertainty in Chinese Demand Add Volatility to Global Metals Markets
Copper prices are surging on the back of a tightening global supply outlook and unexpectedly strong demand from the United States, even as U.S. stockpiles rise. On the London Metal Exchange, the three-month copper contract climbed to $9,538 per ton, up 1.5% from the previous close, signaling a sharp reversal from earlier losses.
U.S. Demand Offsets Supply Build
Despite a noticeable increase in COMEX copper inventories, the latest data from S&P Global Market Intelligence (Markit) suggests robust U.S. copper consumption, with April imports hitting record highs since 2014. Analysts see this trend as a counterbalance to the rising inventories, which would usually signal weakening demand.
“If official figures confirm this, it may further support copper price speculation,” said Thu Lan Nguyen, head of commodity and FX research at Commerzbank AG.
However, Nguyen cautioned that the current U.S. demand surge is likely temporary. A forecasted economic deceleration and tariff impacts could reduce demand in the coming quarters.
Russian Aluminum Faces Sanctions Fallout
Simultaneously, Western sanctions are beginning to squeeze the Russian aluminum sector, with the country’s top producer reporting a 10% production drop since late 2024. The U.S., U.K., and EU have intensified restrictions, curbing access to finance, buyers, and critical technologies.
Though Russia retained over 5% of global aluminum production in 2024, trailing only India, new export barriers threaten long-term output.
China has emerged as a key buyer of Russian aluminum, helping to stabilize market flows. However, ongoing U.S.-China trade tensions and a looming slowdown in Chinese infrastructure investment are raising concerns over sustained demand.
“A permanent production decline in Russia appears likely,” Nguyen said, adding that any eventual global economic recovery could tighten aluminum supply significantly.
Strategic Metals in Flux
These developments underscore the fragile balance in strategic metals markets, where geopolitical risks, supply chain shocks, and shifting consumption patterns collide. For copper and aluminum, the near-term pricing trajectory hinges on U.S. demand sustainability, China’s economic direction, and further sanctions enforcement.
As global industries seek resilient and diversified supply chains, price volatility in these core industrial metals is likely to persist.
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