Copper edges up on thinning stocks, eyes 10-week winning streak

Copper prices edged higher on Friday, poised to record a 10-week winning streak, as dwindling inventories outside the U.S. and a weakening dollar provided support. The London Metal Exchange's benchmark three-month copper rose 0.3% to $14,373 per metric ton, inching closer to its record high of $14,527.50. Copper has rallied every week since the week starting June 29, as U.S. inventories built up in anticipation of possible import tariffs, squeezing markets elsewhere.

U.S. copper imports in July hit a record high, while Shanghai Futures Exchange data showed copper inventories fell 13% to 63,000 tons, the lowest since January 2024. LME copper stocks dropped by 475 tons, and an additional 1,550 tons were withdrawn. The uncertainty surrounding tariffs is expected to keep copper prices buoyed, though already high prices may cap near-term gains.

The plummeting dollar, fueled by expectations of a rate cut, following comments from Federal Reserve Governor Christopher Waller, made copper more attractive to foreign buyers. Aluminium fell 0.5% to $3,295, but was on track to end the week 1.6% higher. The cash-to-three-month aluminium spread turned into a slight backwardation, indicating higher demand.

Analysts like Citi remain cautiously optimistic, citing low visible inventories and a tight physical market, suggesting the outlook for copper remains neutral to constructive in the short term. Zinc rose 0.5% to $3,932.50, with the three-month spread still in steep backwardation, while lead climbed 0.5% to $1,912.50, and nickel increased 0.2% to $16,825. Tin, however, dipped 0.4% to $54,700.