Copper popped as much as 1.3% in London, moving in step with stronger stock markets, even with a widely anticipated US rate hike slated for Wednesday. By late morning, the London Metal Exchange price for copper stood at $14,371 a ton, a 1% gain, and the rest of the metals complex was also in the green.
Fed policymakers penciled in one more increase later this year - a potential drag for metals tied to capital-heavy manufacturing and industrial activity. Still, cheaper oil together with a more hawkish stance lifted broader confidence in the central bank's ability to keep inflation in check.
Traders also latched onto signs of tighter physical conditions in China. Premiums that importers pay over futures to lock in cargoes at Shanghai's Yangshan port have jumped in recent days, pointing to stronger spot buying. The market is stabilizing after a pullback from last week's record, when prices had surged on wagers the US might slap tariffs on refined copper and as a spike in US imports stoked worries about shortages elsewhere.
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Under the surface, the narrative still leans supportive: expected pull from data center buildouts and clean energy projects, plus disruptions at key mines, continues to underpin prices. As RBC Capital Markets analyst Sam Crittenden put it, "Reports of no US copper tariffs unwound some of the physical market speculation," and "Despite near-term price weakness, fundamentals remain constructive."
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