Copper Prices Edge Higher Amid US Inflation Surprise and Warehouse Tightening

Copper Climbs on US Inflation Data and Dollar Weakness

On July 15, 2026, copper prices edged higher, reflecting a market reaction to softer US inflation data released earlier this week. The US Core Consumer Price Index (CPI) came in below expectations, triggering a drop in US Treasury yields and weakening the US dollar. This macroeconomic backdrop generally benefits commodities priced in dollars, including copper, by making them cheaper for holders of other currencies.

As of June 1, 2026, copper was priced at $13,552 per tonne, up 0.3% from the previous close of $13,512, according to the latest available data. The modest price gain came amid a broader risk-on sentiment in commodities, supported by easing inflation concerns and expectations of a less aggressive Federal Reserve monetary policy stance.

Warehouse Dynamics Tighten, Supporting Physical Demand

Beyond macro factors, copper’s fundamental picture is being bolstered by tightening inventories on the London Metal Exchange? (LME). ING analysts Warren Patterson and Ewa Manthey highlighted on July 14, 2026, that strong physical demand combined with a surge in LME cancelled warrants is underpinning prices.

Cancelled warrants on the LME jumped by over 23,000 tonnes on Monday, July 12 or 13, reaching about 43% of total LME copper inventories. This means a significant portion of copper stocks has been withdrawn from immediate sale, reducing available supply on the exchange?. On-warrant stocks are at multi-month lows, signaling that material is being redirected, notably to the US market ahead of potential import tariff considerations.

This inventory tightening is a critical factor because it reflects real-world demand for copper rather than speculative holding. It also suggests that physical buyers are securing material amid uncertainty, which supports prices even as futures markets weigh other risks.

Supplier Price Increase and Production Outlook

Adding to the supply-side pressure, copper suppliers announced a 7.5% price increase on July 10, 2026. This move reflects rising production costs and the desire to pass these on amid strong demand signals.

Rio Tinto PLC, one of the world’s largest copper producers, reiterated its production forecast for fiscal year 2026 on July 14, projecting output between 800 and 870 million tonnes. This steady supply outlook provides some assurance that production will meet demand but also raises questions about inventory accumulation, given recent stockpile data.

Inventory Surplus and Tariff Uncertainty Cloud Outlook

Despite these bullish signals, the copper market faces headwinds. Macquarie analysts remain skeptical about near-term demand growth driven by artificial intelligence (AI) projects, citing delays and a shift toward optical connectivity that reduces copper use. They cut their global copper demand growth forecast for 2026 to 1.8% from 2.0% and estimate a 262,000-tonne surplus for the year.

Moreover, the US Department of Commerce missed its June 30 deadline to recommend tariffs on refined copper imports. The absence of a tariff decision introduces uncertainty and could lead to a narrowing of the price spread? between COMEX and LME copper contracts, which has been a key factor in arbitrage and inventory flows.

Combined inventories across LME, COMEX, and the Shanghai Futures Exchange? (SHFE) reached 1,144,966 tonnes at the end of May 2026, the highest level since January 2003. This suggests that refined copper production has outpaced demand, potentially capping upside price momentum.

Price Snapshot and Market Risks

Balancing Bullish and Bearish Forces

The copper market today is a study in contrasts. On one hand, softer US inflation and a weaker dollar provide a supportive macro backdrop. On the other, elevated global inventories and uncertain tariff policies temper enthusiasm. The surge in LME cancelled warrants and supplier price hikes indicate strong physical demand, but the looming risk of a surplus and subdued demand growth forecasts from Macquarie caution against over-optimism.

Investors and traders should watch closely for developments on US tariff decisions and monthly inventory reports from major exchanges. Any shift in these factors could quickly alter the copper price trajectory.

Comparing Copper to Other Commodities

For those tracking commodities broadly, copper’s recent price action contrasts with gold and oil. Gold prices have faced pressure amid geopolitical tensions and hawkish Fed signals but maintain support near $4,000 per ounce. Oil markets remain sensitive to supply disruptions and demand forecasts. Understanding copper’s unique supply-demand dynamics helps contextualize its moves within the broader commodity complex.

Where to Access Copper Markets

For traders considering exposure to copper, platforms like eToro offer access to futures and CFDs with competitive fees and spreads. Comparing broker offerings can help optimize trading strategies amid today’s market volatility.

FAQ

Why did copper prices rise on July 15, 2026?

Copper prices rose primarily due to lower-than-expected US Core CPI data, which weakened the US dollar and lowered interest rates, making commodities more attractive. Additionally, tightening LME warehouse inventories and strong physical demand supported the price.

What is the significance of LME cancelled warrants increasing?

A surge in cancelled warrants means more copper has been withdrawn from LME warehouses, reducing available supply for immediate sale and indicating strong physical demand or stockpiling ahead of possible tariffs.

How does the US refined copper tariff uncertainty affect the market?

The missed deadline for tariff recommendations creates uncertainty, which could narrow the price spread? between COMEX and LME copper contracts, impacting arbitrage opportunities and inventory flows.

What are the risks to copper prices despite current gains?

Risks include a potential copper surplus forecasted by Macquarie, slower demand growth due to technological shifts, and high combined global inventories, which could cap price upside.

What to Watch Next

Market participants should monitor the US Department of Commerce’s next moves on refined copper tariffs and upcoming monthly inventory data from LME, COMEX, and SHFE. These factors will be critical in shaping copper’s price direction in the coming weeks.

Related reading

For more context, read Gold price guide.

For more context, read Oil price guide.