Copper hit $6.20 this week, but the real story isn't the Fed

By Siam Sukkhee Trading Co., Ltd — 2026-07-07 — copper market Southeast Asia

Copper touched $6.20 a pound this week. Not because the market suddenly grew optimistic, but because the American jobs data was absolutely dire.

57,000 jobs in June. They were expecting 113,000. That single number—barely half what anyone forecast—shifted everything in metals markets within hours.

The logic is straightforward, actually. Weak payrolls mean the Fed won't hike rates in July. Lower rates mean cheaper money for construction and manufacturing. More building, more copper demand. The market saw the signal and ran with it. Ian Lyngen at BMO put it bluntly: the jobs data has "all but eliminated the possibility of a July rate hike." That's not hedging. That's a fact.

Chinese institutional funds helped. They've been rotating out of gold—valuations are stretched, you know—and into metal futures where the supply-demand story is tighter. Copper got caught in that rotation. Southeast Asia felt it directly, because when Chinese institutions buy copper futures, available supply in the markets we source from tightens up as well.

But here's the question everyone keeps asking: how long does this hold?

S&P Global published a warning that prices might be running too hard. Inventory dynamics don't support these levels, they reckon. And fair enough, copper has form for this—rally hard when macro conditions align, then give back everything the moment the catalyst disappears. If inflation stays stubborn—it was 4.2% year-on-year in May—the Fed might decide one weak jobs print isn't enough to step back entirely. The bounce could evaporate inside a month.

Actually, that's not quite right. The Fed could pause without abandoning the entire tightening cycle. That's the real risk for copper bulls.

None of that matters much to me.

Citi forecasts a refined copper shortage of 308,000 tonnes for 2026. J.P. Morgan's numbers are worse—closer to 330,000 tonnes. These aren't speculative forecasts. They're based on actual demand: AI infrastructure buildout, defense spending, electrification. By 2040, copper demand is supposed to hit 42 million metric tons. That's roughly 50% above where we are now. No Fed pivot resolves that.

Southeast Asia is the story that gets me, honestly. Urban expansion across Vietnam, Indonesia, the Philippines—3.3 million metric tons of additional copper demand by 2035, just from power grid construction and port development. These are projects that won't break ground until late 2026 or 2027. If you're sourcing copper for them right now, betting on a price correction is a strategy with its own cost. The supply gap doesn't wait for the Fed calendar.

$6.20 is historically elevated. Agreed. But the shortage isn't contingent on July's interest rate decision.

It's already baked in.

Tags: LME Copper, Citi, S&P Global, copper supply deficit 2026, copper price forecast Southeast Asia, Fed rate hike copper market