Copper is heading for its steepest weekly drop since May, with London Metal Exchange (LME) futures down over 2%. Bloomberg reported that costlier energy and a stronger dollar have clouded the demand outlook.
The slide began in the same week Deutsche Bank forecast a rally of about 50% for the metal.
What Pulled the Copper Prices Down This Week?
Oil gains tied to the Iran war have weighed on copper in recent sessions, according to Bloomberg. Three-month LME copper closed at $14,243.50 a ton on Thursday, down 1.16% on the day, according to LME data.
Data from China, the world’s largest copper consumer, is another headwind. Industrial profits there rose 4.2% year on year in August, slowing from 11% growth in July.
That was the weakest reading since profits fell last November. Copper dropped 1% to $14,478 a ton on the LME on Monday morning, with zinc and aluminum also lower.
A stronger US dollar added to the pressure. The US Dollar Index (DXY), which measures the greenback against six major currencies, has gained 0.77% so far this week. It stood near 101.97 on Friday.
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Can a Supply Squeeze Outlast the Macro Pressure?
While oil, the dollar, and Chinese data have pressured demand this week, Deutsche Bank’s bullish call rests on supply. The bank sees copper reaching $22,050 a ton in the second quarter of 2027.
Analyst Daniel Ghali referred to the current environment as a “historic scramble for metal.” Deutsche Bank estimates that China holds 2.05 million tons of copper in strategic reserves.
Threats of US copper tariffs have also pulled metal into American warehouses. The bank expects 1.3 million tons to sit there by year-end.
Together, the bank calculates, those holdings could tie up 71% of global above-ground inventories by the end of 2026. BMO Capital Markets has also lifted its outlook, raising its 2030 copper forecast to about $18,000 a ton.
Thursday’s close left copper nearly $7,800 below Deutsche Bank’s $22,050 target, which implies about 55% upside. Chinese buyers return once the National Day holiday ends on October 7.
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