Copper Nears Record Highs as Global Stocks Decline
Tashkent, Uzbekistan (UzDaily.uz) — The metals market resumed its rise in early August, with industrial metals supported by falling inventories and limited supply. Copper prices moved above US$6.6 per pound, approaching record highs, while gold, silver and platinum also strengthened, Alpari analyst Anna Bodrova said.
According to the analyst, investor sentiment improved following reports of a possible agreement between the United States and Iran on reopening the Strait of Hormuz. This reduced concerns about a new wave of inflation and weakened expectations of a tighter US Federal Reserve policy.
Gold is holding near US$4,100 per ounce, while silver is trading above US$59.5 per ounce. Both precious metals have recovered for a second consecutive day. Falling oil prices amid progress in talks over the Strait of Hormuz reduced expectations of a Federal Reserve rate hike in September. According to the data cited, the probability of such a decision fell to about 57%, from 67% a day earlier.
Market participants, however, have not yet drawn definitive conclusions about the US central bank’s future policy.
Federal Reserve officials have said they are prepared to raise rates if inflationary pressures intensify. Investors will focus in the near term on new US employment data, which could affect expectations for future Federal Reserve decisions.
Platinum remains one of the strongest-performing precious metals. Its price is holding above US$1,700 per ounce, near its highest level in seven weeks. Both improved market sentiment and fundamental factors are supporting prices.
Valterra Platinum, the world’s largest platinum producer, reported a significant increase in profit and expects further growth in demand for the metal amid the development of infrastructure for artificial intelligence. At the same time, according to the analyst, the global platinum market remains in a supply deficit, supporting prices.
Copper has shown the most notable performance among industrial metals. Its price again exceeded US$6.6 per pound and approached record highs. One of the main drivers of the increase has been declining global inventories.
Ahead of a decision by the US administration on possible import tariffs, traders are actively redirecting copper shipments to the US market. More than 200,000 tonnes of metal arrived in the United States in July, the highest monthly volume in more than a decade.
At the same time, copper inventories in London Metal Exchange warehouses fell to their lowest level in five months.
Some of the metal was sent to China to cover a local shortfall. Over the longer term, demand for copper is also being supported by the development of artificial intelligence, construction of data centres and the global energy transition.
Aluminium prices also continued to rise. The metal climbed above US$3,210 per tonne, reaching its highest level in almost one and a half months. Supply constraints remain the main supporting factor.
Aluminium production outside China fell by almost 7% in July, while inventories in London Metal Exchange warehouses declined to their lowest level since records began. Production restrictions in China and lower output forecasts from major producers are also putting additional pressure on supply.
Some new production capacity is expected to return to operation by the end of the year, but the current market balance remains tight.
Overall, according to Alpari analyst Anna Bodrova, the metals market is gradually shifting its focus from geopolitical risks to the fundamental balance between supply and demand. Softer inflation expectations are supporting precious metals, while industrial metals are becoming the main market drivers.
Falling inventories, structural supply deficits and sustained demand from the energy, infrastructure and artificial intelligence sectors are creating a basis for metals prices to remain high in the second half of the year.
