LONDON (Realist English). On 20 August, copper prices held above the psychological $14,000 per tonne mark following an unexpected intervention by the US Treasury Department aimed at curbing rising bond yields.
Treasury Secretary Scott Bessent ordered a sharp increase in long‑term bond buybacks, which weakened the dollar and supported industrial metal prices that had come under pressure earlier in the week due to an easing of short‑term supply tightness.
Trading dynamics
As of 12:08 Shanghai time, copper on the London Metal Exchange (LME) traded 0.2% higher at $14,075 per tonne. On 19 August, prices rose 0.5% to $14,052, rebounding from two‑week lows hit after a sharp replenishment of warehouse stocks.
Copper has remained above $14,000 for nine consecutive trading sessions. On Monday, 18 August, prices rose to $14,396 – close to the all‑time high of $14,527.50 set in January.
| Parameter | Value |
| LME price (20 August) | $14,075/t |
| Weekly high | $14,396/t |
| All‑time record | $14,527.50/t (January 2026) |
| Days above $14,000 | 9 |
| Spot premium | Up to $535/t (highest since 2021) |
| LME inventories (weekly) | +75% (to 158,750 t) |
Source: LME, trading data
Treasury intervention and its impact
On 19 August, the US Treasury Department announced it would double its long‑term bond buyback operations, aiming to reduce Treasury yields and lower borrowing costs for the economy.
The drop in bond yields weakened the dollar: the Bloomberg Dollar Spot Index fell to a three‑month low. For commodity markets, this means metals priced in dollars become cheaper for buyers in other currencies, stimulating demand.
Market overview: volatility amid inventory swings
The week on the LME has been turbulent. Copper came under pressure earlier as short‑term supply tightness began to ease: large volumes of metal were delivered to LME warehouses on Tuesday and Wednesday.
LME copper inventories rose nearly 75% over the week to 158,750 tonnes. By comparison, just a month earlier, stocks had fallen 32% to 205,000 tonnes.
The spot market remains tight: the premium for spot copper over three‑month futures reached $535 per tonne – the highest since 2021 – signalling persistent shortages of metal for immediate delivery.
Causes: tariff expectations and global imbalance
The key structural factor remains expectations of US tariffs on copper imports. The Trump administration has proposed a 15% tariff on refined copper imports from 2027, rising to 30% by 2028. In anticipation, traders are aggressively moving metal into the US – COMEX inventories have risen 8% to 735,000 tonnes.
Yet the US consumes only 6–7% of global copper but holds nearly 70% of visible stocks on the three global exchanges.
This creates a paradox: global inventories exist, but they are concentrated where they are not needed. Metal that has made its way to the US is difficult to re‑export due to transport and tariff costs, exacerbating shortages in other regions.
At the same time, structural supply problems persist:
- Chile – production fell 6.7% in the first half of the year; the annual forecast has been lowered to 5.27 million tonnes.
- Antofagasta – cut its annual production forecast by 5% due to weather disruptions at the Los Pelambres mine.
- Indonesia – the Gresik smelter outage is delaying shipments.
Expert opinion: ‘An extremely volatile market’
Saxo Bank senior strategist Ole Hansen told journalists:
“Part of the rise in the spot premium may be explained not by physical shortages but by short covering ahead of settlement dates.
High copper prices could themselves dampen demand: companies begin to look for substitutes and improve efficiency. The market is extremely volatile, and any change in the macroeconomic or political backdrop could trigger sharp moves.”
BNP Paribas analyst David Wilson, for his part, acknowledged that copper has entered overbought territory but added: “Given the current tightness in the market, I’m not sure that means anything.”
Two forces on the same scale
Copper remains caught between two forces. On one hand, the Treasury intervention weakens the dollar and supports prices in the short term. On the other, easing supply tightness on the LME and rising warehouse stocks create headwinds.
The key factor remains US tariff policy: traders will continue to move metal to America in anticipation of tariffs, keeping prices elevated.
Citigroup analysts had previously forecast that prices could reach $15,000 within a year. Barclays, meanwhile, believes the tightening supply trend will continue and that mining stocks have further upside potential.
However, risks are clear: high prices could begin to “eat into” demand, and the tariff decision could be delayed or softened.
As analysts note, the market is extremely volatile, and any change in the macroeconomic or political backdrop could trigger sharp moves. The question is whether copper can hold above $14,000 in the coming weeks – or whether a correction awaits.
