Copper Extends Rally on Tight Supply

Copper futures rose above $5 per pound on Friday, gaining roughly 6% for the week, as traders redirected shipments toward the US to get ahead of potential tariffs, causing a supply squeeze in the global market. Since the Trump administration launched a probe into copper imports in February, around 400 kilotons have been rushed into the US to get ahead of possible levies. This diversion has tightened global supply, prompting traders to withdraw metal from LME warehouses and triggering sharp backwardation in the futures curve. On-warrant inventories have plunged 80% year-to-date, with tom/next spreads widening to $40 per tonne. Adding to the bullish sentiment are easing geopolitical tensions in the Middle East, reduced fears of reciprocal tariffs, expectations of further stimulus from China, and a more dovish Federal Reserve—all supporting the outlook for global demand.