Copper heads for steepest weekly drop since May as LME futures fall over 2%

  • Copper futures fell as energy costs, the dollar and Chinese data weakened the demand outlook.
  • 2.05 million tons of copper are estimated to be held in China’s strategic reserves.
  • Chinese buyers return after the National Day holiday ends on October 7.

Copper is heading for its steepest weekly decline since May, with London Metal Exchange (LME) futures down more than 2% as higher energy costs, a stronger U.S. dollar and softer Chinese industrial-profit growth weigh on the demand outlook. Oil gains linked to the Iran war have added pressure, while three-month LME copper closed at $14,243.50 a ton on Thursday, down 1.16% on the day. The metal also fell 1% to $14,478 a ton on Monday morning, with zinc and aluminum lower. China’s industrial profits rose 4.2% year on year in August, slowing from 11% growth in July and marking the weakest reading since profits declined last November. The U.S. Dollar Index (DXY), which tracks the dollar against six major currencies, has gained 0.77% this week and stood near 101.97 on Friday. Deutsche Bank’s bullish outlook is based on supply constraints rather than near-term demand, with a forecast for copper to reach $22,050 a ton in the second quarter of 2027. The bank estimates China holds 2.05 million tons in strategic reserves, while U.S. tariff threats have drawn metal into American warehouses, where holdings are expected to reach 1.3 million tons by year-end. Together, those stocks could represent 71% of global above-ground inventories by the end of 2026. BMO Capital Markets has raised its 2030 forecast to about $18,000 a ton. Chinese buyers are due to return after the National Day holiday ends on October 7.

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