Copper nears record on mine outages and rising EV demand

Copper climbed 5% to $13,643 a ton on the London Metal Exchange, its strongest intraday level since Jan. 29. The rise stretched across LME contracts, with gains on prompt and deferred delivery dates.

Market participants reported reduced output at several mines and shortages of sulfur used in smelting. Those issues narrowed the flow of concentrate into refineries and forced some smelters to cut processing rates.

Traders and physical buyers reported an increase in trades for prompt delivery, a sign that available refined metal is tightening rather than moves limited to the front-month futures contract.

Sulfur is used in key refining steps, and lower sulfur availability has constrained smelter throughput. Unplanned outages at mines reduced concentrate supplies, compounding pressure on plants and exchange warehouses.

Demand expectations remain tied to decarbonization programs, grid expansion, renewable project buildouts and electric vehicle production. An electric vehicle typically contains about three to four times more copper than a conventional car.

The synchronized rise across LME contracts reflected tightness across delivery dates rather than a short-lived technical spike. Traders will monitor mine and smelter output and LME inventories to assess whether the current squeeze eases.

Higher metal prices increase input costs for sectors that use large amounts of copper, including electrical infrastructure projects, data center builds and operators that run power-intensive equipment.