Copper Price Forecast: HG=F Gains on Dollar Weakness and Chinese Demand

Copper Price Outlook: HG=F Surges as Dollar Weakens and China Signals Recovery

The Copper price (HG=F) ended August at $9,875 per metric tonne, its highest close in over a month, after briefly touching $9,917. That marked a 3% gain for the month, driven by expectations of U.S. interest rate cuts and improved appetite in China. A softer U.S. dollar, down 2% in August—its steepest monthly decline of 2025—added fuel, making dollar-denominated metals cheaper for international buyers. With U.S. second-quarter GDP revised higher and markets anticipating the Federal Reserve could ease policy before year-end, copper’s rally has been anchored in both macro tailwinds and seasonal patterns. Historically, September brings stronger industrial demand than the summer period, and traders are positioning accordingly.

HG=F Demand Anchored by China’s Consumption Shifts

China remains the single most important demand driver for copper, and the signals there are finally tilting more supportive. Inventories on the Shanghai Futures Exchange fell 2.4% in the last week of August, while the Yangshan premium for imported copper held firm at $55 a tonne, its highest since early June. The renminbi posted its sharpest monthly gain against the dollar since May, reinforcing Chinese importers’ buying power. Traders in Shanghai describe a market where buyers are returning, encouraged by stronger currency dynamics and constrained local supply. Market chatter also suggests that refined copper supply in China could contract into September, further tightening conditions. That shift matters: Chinese property and industrial activity have weighed heavily on demand in recent years, but signs of stabilization are now becoming visible.

Nvidia’s Results Ripple into Copper Market Sentiment

Investor sentiment toward copper has also been shaped by developments outside pure commodity demand. Nvidia’s stronger-than-expected earnings in late August reinforced optimism around the artificial intelligence buildout. Copper is a critical input for electronics and renewable energy infrastructure, and the AI-driven technology expansion is seen as a new demand pillar. Benchmark three-month copper on the London Metal Exchange rose 0.2% after Nvidia’s report, recovering from a prior dip. The metal has already advanced 11% so far in 2025, but remains capped by the inability to decisively hold above the psychologically important $10,000 per tonne level. Analysts stress that while AI-related optimism provides short-term support, oversupply risks remain pronounced.

Inventory Dynamics Show Divergent Trends

Oversupply signals are most visible in Western markets. LME copper inventories climbed by 1,850 tonnes in late August to 157,950 tonnes, the highest in three months. On the U.S. Comex exchange, inventories have nearly tripled since January, reflecting large inflows of copper ahead of Washington’s 50% tariff hike. That supply overhang could keep U.S. pricing subdued unless Asian and European demand absorbs the excess. In contrast, China’s imported copper market has been active, with premiums for bonded stocks and warehouse warrants rising steadily through August. EQ copper CIF premiums climbed from $24/mt to $28/mt, indicating improving import economics. Customs data showed July exports exceeding expectations, raising speculation that some LME stock may even flow back into China.

Copper Price Supported by DeFi Expansion and Institutional Demand in Commodities

Institutional activity is becoming increasingly important in metals markets. Hedge funds and asset managers have ramped up long positioning in copper futures as macro indicators signal demand recovery. BlackRock and VanEck, which have already been pushing into commodity-linked ETFs, are reported to be eyeing new copper exposure. This coincides with broadening use of copper within green energy, EV manufacturing, and power grid upgrades. Analysts suggest that if current momentum holds, HG=F could retest $10,000 in Q4, with near-term resistance at $9,950 and support at $9,700. A break above $10,000 would put the $10,300–$10,500 range into play, levels last seen in early 2022 during the peak of the supply crunch.

Copper and the Macro Landscape: Fed, Dollar, and Tariffs

The macro environment remains a double-edged sword. Expectations of a Fed rate cut boost copper demand via a weaker dollar and looser financial conditions, but persistent U.S. inflationary risks could keep the central bank cautious. On the trade front, the 50% tariff on imported Chinese copper entering the U.S. earlier this summer created distortions, shifting flows and building inventories stateside. While that initially pressured prices, it also encouraged arbitrage opportunities that have helped keep the import window to China open. Market participants note that September’s policy decisions from both Washington and Beijing will be critical in determining whether copper sustains its rally or faces renewed headwinds.

Broader Metals Context and Comparative Strength

Copper’s movement has been mirrored across base metals but with varying momentum. Aluminium sits at $2,615 a tonne, zinc at $2,814, and nickel at $15,375, with tin the standout at $35,325 after touching its strongest level in nearly five months. Supply disruptions in Myanmar have reduced ore flows, tightening tin markets and underscoring how production risks can swiftly impact prices. Compared to these metals, copper’s appeal lies in its dual exposure to cyclical demand and structural energy transition themes. Investors are closely watching whether copper will decouple from broader metals in September, driven by DeFi-led liquidity and institutional inflows.

Hindustan Copper: A Case of Valuation Risks Amid Sector Tailwinds

Beyond raw pricing, equities tied to copper tell a more cautious story. Hindustan Copper Limited (NSE:HINDCOPPER) is trading at a lofty price-to-earnings ratio of 45.7x, well above the market average near 27x. The company has posted impressive earnings growth—EPS rose 35% in the last year and 26% over three years—but analysts warn that growth is not keeping pace with market expectations. With core markets like India already reflecting high penetration and the broader market forecast to grow earnings at 25% annually, Hindustan Copper’s premium valuation could face pressure. Unless earnings accelerate materially, its multiples may compress, suggesting equity investors should temper bullishness even if the commodity itself trends higher.

HG=F Outlook: Buy, Sell, or Hold?

The Copper price (HG=F) near $9,875 reflects a market balancing optimism from Chinese demand revival, AI-driven infrastructure investment, and expectations of Fed easing, against oversupply pressures in the U.S. and elevated inventories globally. Near-term, the $9,700 support and $9,950–$10,000 resistance range will determine momentum. Given strong institutional inflows, a recovering yuan, and firm Yangshan premiums, the market bias leans bullish. For now, HG=F earns a Buy rating above $9,700, with upside potential toward $10,300–$10,500 if macro tailwinds align.

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