Copper prices have recently surged to record highs, creating curiosity across industries, traders, and investors. If you’re wondering why copper prices are increasing, the answer lies in a mix of supply cuts, rising premiums, market sentiment, and global economic factors. Let’s break down the key reasons behind the latest copper rally. Check Out Copper Scrap Rate
💥Click for: CURRENT COPPER SCRAP PRICES💥1. Chinese Smelters Planning Major Production Cuts
Copper’s price jump began after China’s biggest smelters agreed to cut production by more than 10% in 2026. The China Smelters Purchase Team (CSPT) announced this move to counter negative copper concentrate processing fees.
Since China is one of the largest copper producers and consumers, any plan to reduce output immediately tightens supply expectations—pushing prices higher.
2. New Record Highs on SHFE and LME
Copper prices touched new peaks across global exchanges:
- Shanghai Futures Exchange (SHFE): The most-active contract surged 2.08% to 89,020 yuan/ton, hitting a fresh all-time high of 89,650 yuan/ton.
- London Metal Exchange (LME): Benchmark three-month copper climbed to a record $11,294.5/ton, before stabilizing at around $11,216/ton.
These record levels reflect strong bullish sentiment driven by limited supply and strong demand forecasts.
3. Codelco’s Record-High Premiums Boost Market Sentiment
Another major reason why copper prices are increasing is the dramatic rise in copper premiums by Codelco, the world’s largest copper producer.
Premium Highlights
- For Chinese buyers: Premiums were offered as high as $350/ton, shocking the market.
- For U.S. clients: Premiums surged above $500/ton.
These unusually high premiums signal tighter availability of refined copper and rising logistical or arbitrage pressures. Traders see this as a sign of further strengthening in global copper markets.
4. Bullish Momentum from Asia Copper Week 2025
Positive headlines and optimistic discussions from Asia Copper Week 2025 in Shanghai encouraged traders to take long positions. Market participants are expecting stronger demand and tighter supply conditions going forward, adding fuel to the copper price rally.
5. Expectations of U.S. Fed Rate Cuts
Rising hope that the Federal Reserve might cut interest rates in December boosted copper prices. Lower interest rates usually support economic expansion—especially in construction, manufacturing, and electrical industries that rely heavily on copper.
6. Weakening U.S. Dollar Supporting Commodity Prices
The U.S. Dollar Index (DXY) continued to soften. A weaker dollar makes dollar-denominated commodities like copper cheaper for buyers using other currencies, increasing global buying interest.
7. Other Base Metals Also Gaining Strength
Copper’s rally was supported by positive movement in other metals:
- On SHFE: Aluminium +1.44%, Zinc +0.78%, Tin +2.68%, Nickel +0.26%
- On LME: Aluminium +0.21%, Zinc +0.13%, Nickel +0.34%, Tin +1.08%
This broad-based rise indicates a strong overall commodities market.
Conclusion : why are copper prices increasing?
So, why are copper prices increasing?
The answer lies in a powerful combination of supply cuts, record-high premiums, market optimism, economic expectations, and a weakening dollar. With global demand staying strong and supply tightening, copper prices are likely to remain elevated in the near term.