Copper prices have retreated from their record highs in July, but analysts say the metal’s powerful rally is far from over. Strong demand is expected to outstrip supply soon, potentially setting the stage for another sharp upside move.

John Caruso, senior market strategist at RJO Futures, said copper is “a ticking time bomb waiting for an explosive price move,” pointing to a likely persistent structural deficit in supply, with demand expected to increase by nearly one million metric tons annually over the next decade.

And while the administration of President Donald Trump has moved away from clean-energy policies — eliminating billions of dollars in funding for industries where copper is a key component — global efforts to tackle climate change continue. The surge in electricity demand from artificial-intelligence data centers is also driving expectations of long-term copper consumption.

David Aspell, co-head of investing at Mount Lucas Management, said the broader demand outlook for copper remains “solid,” supported by AI infrastructure growth and rising requirements from data centers. “Demand is still strong, and it’s expected to stay that way,” he added.

Record Rally Then a Pullback

A Dow Jones analysis of FactSet data shows that benchmark US copper prices at this year’s settlement peak were up 44.5% from the end of 2024.

Copper hit an intraday record of 5.959 dollars per pound on 24 July. CQG data also show that three-month LME copper futures touched an unprecedented 11,200 dollars per metric ton on 29 October.

Speculation that the Trump administration might impose tariffs on imported refined copper pushed CME Comex prices in New York above their London counterparts.

“The usually stable spread between London and New York started to diverge when tariffs were floated,” Aspell said. “Comex prices climbed in anticipation of possible measures.”

Importers rushed to bring copper into the US ahead of potential tariffs and were willing to pay higher prices.

However, New York futures fell back after the Trump administration announced that tariffs would apply to processed — not refined — copper.

Comex prices are now down roughly 15% from their highs less than four months ago.

Roqaya Ibrahim, senior commodities and energy strategist at BCA Research, said the ongoing risk of tariffs on refined copper will continue to influence the market.

She noted that the exemption for refined copper will be reassessed in summer 2026, adding that US copper is again trading at a premium to LME levels, signaling continued storage and stockpiling in New York.

Ibrahim expects the global copper market to remain “imbalanced” until the tariff decision is finalized, limiting any meaningful downside in 2025.

The Real Story Behind Copper Demand

Trump’s shift away from clean-energy priorities — cutting funding and encouraging oil, coal, and other fossil fuels — could weigh on demand for copper used across renewable-energy technologies.

But Caruso at RJO Futures said the “real story” is the soaring electricity consumption from AI data centers.

A 2024 US Department of Energy report, authored by Lawrence Berkeley National Laboratory, found that data centers used about 4.4% of total US electricity in 2023. That share is expected to rise to between 6.7% and 12% by 2028.

“The expectation is that electricity demand from AI data centers will continue rising and may double by the end of the decade,” Caruso said.

He added that capital spending on AI infrastructure “remains a dominant market theme with no signs of slowing.”

According to the International Energy Agency (IEA), the global copper market could face a supply shortfall of up to 30% by 2035, driven by mining challenges and soaring demand for electrification technologies.

“AI’s growth phase is still in its very early innings,” Caruso concluded. “In my view, that leaves copper with plenty of room to run.”

Bitcoin edged lower on Thursday, as institutional capital flows into cryptocurrencies continued to weaken, while the end of the prolonged US government shutdown provided only a limited boost to risk appetite in broader markets.

The world’s largest cryptocurrency fell 0.6 percent to 102,775.6 dollars by 00:52 Eastern Time (05:52 GMT), lagging behind the slight gains seen across alternative cryptocurrencies.

Bitcoin ETF flows remain entirely negative

Data from SoSoValue showed that US-listed bitcoin exchange-traded funds recorded outflows of about 278 million dollars on Wednesday, with total outflows reaching 1.2 billion dollars during the first week of November.

And although the funds saw inflows of 247 million dollars over the past seven days, that remains only a small fraction of the heavy outflows that hit the market in late October and early November.

These negative flows follow a roughly 500-billion-dollar wipeout in the crypto market capitalization in early October, which severely undermined institutional confidence and pushed corporate treasuries and ETF operators to retreat from the sector.

This withdrawal has deprived bitcoin of the capital needed to push prices higher. Weak price action has also dampened interest from retail investors, who typically gravitate toward the token due to its volatility and speculative potential.

Bitcoin has struggled since early October to break above 110,000 dollars. It traded below 105,000 dollars for most of November and even briefly fell under 100,000 dollars earlier in the month.

Altcoins rise as the US government reopens

Alternative cryptocurrencies outperformed bitcoin on Thursday, supported by a modest improvement in risk appetite after US lawmakers agreed to end the longest government shutdown in the country’s history.

Ether, the world’s second-largest cryptocurrency, rose 2.6 percent to 3,530.65 dollars, while XRP gained 4.8 percent. Binance Coin and Cardano climbed around 0.9 percent each, while Solana was little changed.

Among meme tokens, Dogecoin rose 2 percent, while the token known as TRUMP traded broadly sideways.

Mild improvement in sentiment after the government-funding bill

These moves came after President Donald Trump signed a bill to fund the government through January 30, following House approval late Wednesday, ending a shutdown that lasted more than six weeks.

Despite the relief, analysts warned that reopening the government also means the return of official economic data releases, which may present a bleak picture of the US economy after the long shutdown period.

Trump had earlier stated that the shutdown cost the US economy roughly 1.5 trillion dollars.

Oil prices edged higher on Thursday, pausing after steep losses in the previous session, as investors assessed the impact of new US sanctions on Russia’s Lukoil while persistent concerns over a global supply glut continued to weigh on sentiment.

Brent crude futures rose 32 cents to 63.03 dollars a barrel by 11:30 GMT, after falling 3.8 percent the day before. West Texas Intermediate crude gained 28 cents to 77 dollars a barrel, following a 4.2 percent decline on Wednesday.

Suvro Sarkar, head of energy sector research at DBS Bank, said: “Oil prices are expected to find strong support around 60 dollars a barrel, especially with the likelihood of temporary disruptions to Russian export flows once the stricter sanctions take effect.”

He added that the US sanctions on Lukoil are part of Washington’s efforts to pressure the Kremlin into peace talks over Ukraine, noting that the restrictions will bar dealings with the Russian company after 21 November.

A rise in US inventories reinforces supply concerns

Despite these developments, investors remained focused on mounting worries about an oversupplied global market.

Data from the American Petroleum Institute released Wednesday showed that US crude inventories rose by 1.3 million barrels in the week ending 7 November. The US Energy Information Administration is set to publish its official figures later on Thursday.

Giovanni Staunovo, energy analyst at UBS, said: “We have seen an increase in oil inventories across major onshore hubs in Europe, Singapore, Fujairah, and the United States, according to last week’s preliminary data.”

Impact of OPEC and IEA reports on sentiment

Oil prices fell more than two dollars a barrel on Wednesday after OPEC said in its monthly report that global oil supply would slightly exceed demand in 2026, marking another shift from its earlier projections of a supply deficit.

Sarkar of DBS Bank noted that “the recent weakness is linked to OPEC’s revision of the 2026 supply-demand balance, which shows the group is now acknowledging the possibility of a surplus, in contrast to its previously optimistic stance.”

OPEC pointed to a potential 2026 surplus driven by broader output increases from the OPEC+ coalition, which includes OPEC members and allies such as Russia.

Separately, the International Energy Agency said in its monthly oil market report on Thursday that it had raised its forecasts for global supply growth for both this year and next, indicating the risk of a larger surplus in 2026.

The US Energy Information Administration also said in its Short-Term Energy Outlook, released Wednesday, that US oil production will reach a new record this year, exceeding earlier estimates.

It added that global crude stocks are set to continue rising into 2026, as output grows faster than demand for petroleum fuels, putting further downward pressure on prices.

The US dollar fell on Thursday after President Donald Trump signed an agreement to end the government shutdown, while the Japanese yen dropped to a record low against the euro following comments from Japan’s new prime minister, Sanae Takaichi, who said she prefers the Bank of Japan to take a slower approach to raising interest rates.

At the same time, the British pound briefly touched a session low before partially recovering, after a report showed that the UK economy barely expanded in the third quarter.

The Australian dollar, meanwhile, reached its highest level in two weeks, supported by official data showing a sharp decline in unemployment from a four-year high, reducing the likelihood of further interest-rate cuts.

Currency markets brace for volatility as delayed data returns

Markets are expected to see increased volatility in the coming days as a series of delayed US economic releases resumes following the end of the prolonged government shutdown late Wednesday. However, the White House said that the October jobs report and consumer-price index may not be released at all.

Michael Brown, chief market strategist at Pepperstone, said: “For now, markets are correctly focused on the fact that resolving the congressional gridlock removes a significant layer of uncertainty and lifts a major drag on growth.”

Yen hits historic lows against the euro and dollar

The Japanese yen hit a record low of 179.805 against the euro on Thursday before recovering slightly to 179.51. It also weakened to 155.02 against the US dollar, coming close to Wednesday’s low of 155.05, a level last seen in early February, before trading at 154.53 in the European session as the dollar slipped 0.17 percent on the day.

Prime Minister Takaichi said on Wednesday that her administration prefers interest rates to remain low and emphasized the need for close coordination with the Bank of Japan.

That same day, Finance Minister Satsuki Katayama issued another verbal warning against the yen’s rapid and excessive weakness as it approached 155 per dollar, pointing to “unilateral and fast movements in the foreign-exchange market.”

Weak yen may force the Bank of Japan to act

The yen’s weakness could push the Bank of Japan to raise interest rates next month. Traders are pricing in a 22 percent probability of a quarter-point rate increase in December, rising to 43 percent by January.

Norihiro Yamaguchi, economist at Oxford Economics, said: “The yen’s weakness likely heightens government concern because it risks triggering a renewed surge in food and energy inflation.”

He added that “the exchange rate has become a decisive factor in the government’s political survival,” noting that to ease the pressure on the yen, the government may eventually have to accept a rate hike by the Bank of Japan.

Pound fluctuates as weak growth data emerges

In Europe, the British pound rose 0.24 percent to 1.3164 dollars after briefly falling to 1.3102 dollars following official data showing that the UK economy barely grew in the third quarter, partly due to a cyberattack in September that disrupted economic activity.

The data confirmed a slowdown in economic momentum ahead of next week’s budget, which finance minister Rachel Reeves is expected to accompany with a series of tax increases.

The euro trimmed overnight losses and rose 0.3 percent against the dollar to 1.1627 dollars, its highest level since late October.

Australian dollar supported by strong labor market

In Australia, traders cut the probability of a December rate cut to just 6 percent after strong data earlier this week.

Thursday’s labor-market report showed a significant increase in employment in October, driven by gains in full-time jobs, easing concerns about a severe slowdown in the labor market.