Copper prices firmed on Friday, July 31, 2026, putting the red metal on course for a solid monthly advance as a weaker US dollar and persistent supply pressures underpinned sentiment across the base metals complex. Benchmark three-month copper on the London Metal Exchange was flat at $13,804.50 per metric ton as of 0300 GMT, while remaining on track to post a gain of approximately 3.25% for the month of July. On the Shanghai Futures Exchange, the most actively traded copper contract advanced 0.71% to 105,510 yuan per ton, equivalent to approximately $15,635.74, reflecting a monthly increase of around 2.75%.
The dollar's overnight decline provided a key catalyst for the move, as a cheaper greenback makes dollar-denominated commodities more affordable for buyers transacting in other currencies. The currency effect compounded a backdrop of tightening physical supply that has lent persistent support to copper throughout the month. Inventory data from LME-registered warehouses underscored the severity of supply constraints.
As of Thursday, copper stocks stood at 255,400 tonnes, down 21.38% from the start of July. Notably, over 60% of remaining stocks are under cancelled warrants, meaning they are eligible for removal from LME facilities, signalling further drawdowns may be imminent. Analysts have pointed to an ongoing flow of copper into the United States as a structural factor straining inventories outside North America.
Metal has been redirected toward US warehouses in anticipation of potential import tariffs, exerting additional pressure on LME and SHFE stocks. On the demand side, Chinese appetite for refined copper received a boost from a domestic scrap shortage. A reduced availability of recycled metal has compelled buyers who would ordinarily source scrap to turn to the refined market instead.
The Yangshan Copper Premium, a widely tracked gauge of physical import demand into China, stood at $112 per ton. While this represented a retreat from the monthly high, the premium remained elevated, up 57.75% on a monthly basis, according to data cited by Energy News. In other base metals, aluminium slipped 0.03% on the LME while gaining 0.21% on the SHFE.
The light metal remained on course to close the month higher, though it has yet to recover to May highs following a brief Middle East peace detente in June that erased a war risk premium embedded in prices. LME aluminium inventories have fallen to their lowest levels in the current century, according to the report. Nickel edged up 0.12% and tin advanced 0.42% on the LME.
On the SHFE, nickel gained 0.45% and tin rose 1.72%, while lead declined 1.24%. The monthly performance of copper and the broader base metals complex reflects a confluence of dollar weakness, geopolitical supply disruptions, and robust Chinese physical demand, factors that market participants are likely to continue monitoring closely heading into August. (Source: Energy News / Reuters)
Source: energynews.oedigital.com