Copper futures climbed above $6.45 per pound on Friday, putting the metal on track to close the week approximately 2% higher and the month roughly 4% higher.

The rally followed the US Federal Reserve's decision this week to leave interest rates unchanged, which eased concerns over the demand outlook for industrial metals. Copper, like other base metals, is sensitive to interest rate policy because borrowing costs influence construction, manufacturing, and infrastructure activity — all major drivers of consumption.

In China, the world's largest copper consumer, the Politburo signaled that it would continue relying on existing policy measures rather than introducing broad-based stimulus. Officials emphasized the need to "fully use" current policy tools while directing fiscal spending and bond issuance toward boosting domestic demand and improving supply-side conditions. China accounts for roughly half of global copper consumption, making its policy posture a key factor in price direction.

Meanwhile, copper continued to draw support from its strong long-term demand outlook. The global transition to clean energy — including electric vehicles, wind turbines, solar installations, and power grid upgrades — requires substantially more copper per unit of energy delivered compared to fossil fuel-based systems, according to International Energy Agency assessments that have classified copper as a critical mineral for the energy transition. Additionally, the rapid expansion of artificial intelligence data centers is expected to further underpin demand, as these facilities require extensive copper wiring and electrical infrastructure. On the supply side, declining ore grades at several major existing mines and a limited pipeline of large new projects have added to concerns about the market's ability to meet rising consumption over the coming years.

Source: Trading Economics