Copper surges to six-month high as supply risks and dollar weakness boost commodities

Copper prices surged above $10,500 a ton on the London Metal Exchange (LME) this week, putting the red metal on course for its strongest weekly gain since April.

The rally has been fueled by supply disruptions, a softer U.S. dollar, and renewed optimism over global demand, according to Access Bank daily market commentary.

So far this year, copper has advanced nearly 20 percent, supported by the U.S. Federal Reserve’s rate cuts that weakened the dollar, making commodities more attractive to investors.

“Additional momentum has come from expectations of robust demand linked to the energy transition and expanding artificial intelligence (AI)-related infrastructure,” the comment showed.

Supply fears intensified after Freeport-McMoRan declared force majeure at its Grasberg mine in Indonesia, one of the world’s largest copper operations.

The move compounded existing concerns of tighter availability, prompting rallies across the broader base metals complex.

Zinc gained more than four percent, while tin climbed seven percent on the week amid similar supply risks. Iron ore, by contrast, remained stable at $103.70 a ton, with trading volumes subdued as Chinese markets closed for a national holiday.

Meanwhile, in currency markets, the U.S. dollar staged a modest rebound yesterday, breaking a four-day losing streak.

“The DXY Index edged 0.15 percent higher, though sentiment toward the greenback remains pressured by political uncertainty over the U.S. government shutdown.

“The deadlock has delayed key economic data releases, including initial jobless claims, with Friday’s closely watched non-farm payrolls report also likely to be postponed,” it stated.

Market participants are increasingly relying on private-sector data to gauge the health of the U.S. economy, while potential delays to upcoming consumer price inflation (CPI) figures could deepen uncertainty.

Analysts warn that the shutdown underscores the need for higher risk premia on the dollar, as investors grapple with reduced visibility into U.S. economic fundamentals.

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