FX.co ★ Copper Rises as Supply Concerns Persist

Copper futures rose above $6.50 per pound on Friday, reversing early-week losses as tight physical supply continued to support prices. The market remains fragile after months of inventory outflows, driven in part by metal being redirected to the US ahead of expected tariffs. Top producer Chile also anticipates a decline in copper output this year, as ongoing operational disruptions weigh on mines and development projects.

Some pressure eased after a recent uptick in deliveries to London Metal Exchange warehouses, which helped relieve a historic supply squeeze. At the same time, copper prices drew additional support from a weaker US dollar, as growing skepticism over the US government’s bond buyback plan undermined the greenback’s appeal and bolstered demand for metals and other currencies.

Investors also kept a close eye on geopolitical risks, with the US preparing sweeping new economic sanctions against Iran. The prospect of tighter sanctions drove oil prices higher, reinforcing inflation concerns and adding another layer of complexity to the outlook for commodity markets.