Copper on the London Metal Exchange advanced for the 11th time in 12 weeks, as signs of improving Chinese demand offset hawkish signals from the US Federal Reserve.

LME copper futures settled 0.2% higher on Friday at $14,521.50 per tonne. The metal touched an all-time high earlier this month during its latest upward run, bringing year-to-date gains to nearly 17%.

In China, the Yangshan copper premium — a key gauge of import demand — climbed to $124 per tonne on Friday, its loftiest level since November 2022, underscoring a clear improvement on the demand side.

Meanwhile, the Fed delivered its first rate hike since 2023 this week and signalled further tightening ahead, yet the impact on copper prices remained relatively muted.

Market attention stays firmly fixed on the eventual outcome of US copper tariffs. Analysts anticipate that base metals will largely trade within ranges over the near term given the uncertain macro backdrop.

Tariff expectations drive yearly rally, Fed hike impact limited

At the heart of copper's sharp advance this year lies strong market conviction that the Trump administration will impose tariffs on refined copper.

That expectation has prompted a wave of early copper shipments into the US, squeezing available supply elsewhere and fuelling sustained gains in LME prices.

The Fed's first rate increase since 2023, accompanied by hawkish guidance on further tightening, had minimal real impact on copper despite higher borrowing costs typically weighing on industrial commodity demand — a sign that confidence in demand is currently trumping rate pressures.

Analysts at BMI, a Fitch Solutions unit, noted in a research report:

"We expect base metals prices to largely trade sideways over the coming weeks as the market digests the impact of a larger-than-expected output decline in Chile, the world's largest copper supplier, while the macro backdrop remains fragile."

The analysts added, "The market continues to await clarity on US copper tariff decisions."