Key Highlights:

  • New record on LME: Copper futures rose as much as 0.8% to $14,533 a tonne, surpassing January's previous record of $14,527.50.
  • Sharp year-long rally: The metal is up about 17% this year and 47% over the past 12 months.
  • MCX also rallies: Domestic copper futures on the MCX jumped up to 1.21% to an intraday high of Rs 1,403.50.
  • Tariff-driven, not demand-driven: The rally is being fuelled more by traders shifting supplies into the US ahead of possible tariffs than by a genuine surge in end-user demand.
  • Supply squeeze outside the US: Copper stocks have grown concentrated in the US, leaving less metal available via the LME network, pushing the market into "backwardation."
  • Hindustan Copper shares jump: Shares of state-owned Hindustan Copper surged over 5% to an intraday high of Rs 537.35 on the BSE.

New Delhi: Copper hit a record high on the London Metal Exchange as expectations of wider US tariffs on refined metal drove traders to move supplies into the United States, tightening availability elsewhere.

Benchmark three-month copper futures rose as much as 0.8 per cent to $14,533 a metric tonne, surpassing the previous record of $14,527.50 set in January.

In addition, the metal is up about 17 per cent this year and 47 per cent over the past 12 months.

In the domestic market too, copper futures (September) jumped as much as 1.21 per cent or Rs 16.8 to hit an intraday high of Rs 1,403.50 by 10:30 am on the Multi Commodity Exchange (MCX).

Why Tariff Fears, Not Demand, Are Driving The Rally

The rally reflects a longer-term mismatch between supply and demand, with ageing mines struggling to keep pace with consumption from data centres, renewable energy projects and power grids.

But the latest surge has been driven more by tariff-related flows than a sudden increase in end-user demand.

Moreover, the US Commerce Department was due to advise the White House on the need for tariffs on refined copper, but no final decision has been disclosed more than two months after the June 30 deadline.

Understanding The Supply Squeeze: Backwardation Explained

While global inventories remain relatively high, copper stocks have become concentrated in the United States, leaving less metal available through the LME network.

Similarly, spot copper continues to trade at a premium to three-month futures, a market structure known as backwardation that signals tight near-term supply.

What Is Backwardation: In commodity markets, prices for immediate ("spot") delivery are usually lower than prices for future delivery, since holding costs like storage and insurance add up over time — a state called "contango." When spot prices instead trade higher than futures, it's called backwardation, and it typically signals that buyers urgently need the physical metal right now more than they're worried about future supply — exactly the scenario unfolding here, as traders scramble to secure copper before potential US tariffs make it costlier or harder to access.

However, global copper mine output fell nearly 1 per cent in the first half of 2026, while concentrate production declined 2.6 per cent, as per reports.

Hindustan Copper Shares Surge

Additionally, shares of state-owned Hindustan Copper Ltd surged more than 5 per cent on Tuesday, touching an intraday high of Rs 537.35 on the BSE.