Copper hit a record on the LME yesterday, topping its previous high of $11,104.50/t set in May 2024. A supportive macro backdrop, falling US Dollar (USD), rate cuts and low inventories have lifted industrial metals prices recently, ING's commodity experts Ewa Manthey and Warren Patterson note.

Chinese buyers show signs of price sensitivity

"Copper is the standout performer in the base metals complex, with prices up more than 25% year-to-date, and on track for its best year since 2017. Copper is rallying due to mounting supply disruptions, most recently Freeport’s declaration of force majeure at its giant Grasberg mine in Indonesia, and the wider risk-on mood ahead of the Trump-Xi meeting. The outlook for Copper is starting to look brighter with balances tightening for both 2025 and 2026 amid supply challenges and rising trade optimism."

"However, the risk of demand destruction shouldn’t be ignored, as Chinese buyers show signs of price sensitivity, which could put a ceiling on Copper's upside. The Yangshan premium, paid by traders for imported metal and a key indicator of physical demand in China, remains in focus. For now, it hovers around $35/t after slumping more than 20% since late September, down from year-to-date highs above $100/t in May."