Copper Set To Test Record High On US-China Trade Talks Progress

Copper is set to test a record high with the US and China on the cusp of a sweeping deal to dial down trade tensions, easing a major risk to global economic growth.

Prices on the London Metal Exchange — the global benchmark that opens at 9 a.m. Shanghai time — closed 1.3% off an all-time peak at the end of last week. In an early sign of sentiment on Monday, futures in New York rose as much as 2.4%, while oil and US stocks also advanced.

US and Chinese trade negotiators wrapped up talks on Sunday that appear to have teed up a deal for Presidents Donald Trump and Xi Jinping to finalize later this week. Trump’s threat of 100% tariffs is “off the table”, and Beijing will pause for a year plans to expand rare earth export controls, according to US Treasury Secretary Scott Bessent.

Copper hit a record high of $11,104.5 a ton in May 2024, and then reached the $11,000 mark earlier this month. It’s wavered since then as China and the US staked out tough positions in the run-up to trade talks. The metal’s strong performance this year — up 25% on the LME — rests largely on a series of mine disruptions in major-producing nations. 

Freeport-McMoRan Inc. cut its copper sales guidance in September after a deadly accident at its giant Grasberg mine in Indonesia. Ivanhoe Mines Ltd.’s Kamoa-Kakula mine in the Democratic Republic of Congo has also suffered major production setbacks.

The dollar’s decline this year has added further momentum to copper, making commodities priced in the US currency more attractive. A gauge of the greenback’s strength has fallen more than 7% since January as investors bet the Federal Reserve will cut interest rates further.

The copper price is also reflecting broader optimism around the energy transition. BHP Group, the world’s biggest miner, sees global demand increasing by around 70% by 2050, and has prioritized the metal as its main growth opportunity.

Copper on New York’s Comex rose 1.7% as of 8:09 a.m. in Shanghai.