Copper prices were poised for a 2.0% weekly gain on Friday, driven by concerns over mine supply disruptions, strong demand in China, and tight inventories outside the U.S. Benchmark copper on the London Metal Exchange (LME) rose 1.6% to $14,541 per metric ton. The Yangshan copper premium, a key indicator of China’s appetite for imported copper, hit a four-year high of $135 per ton following the country’s return from a week-long holiday.
Copper stocks in Shanghai Futures Exchange warehouses increased by 20,000 tons to 58,744 tons, though this followed a significant drawdown to the lowest level since January 2024. Meanwhile, LME copper inventories dropped to a six-week low of 233,025 tons after net outflows of 2,200 tons. The U.S. has seen record copper stockpiles at 711,609 tons, supported by shipments ahead of potential import tariffs.
Morgan Stanley noted that while a slowdown in U.S. stockpiling could ease market tightness, China’s demand remains resilient, and supply faces significant disruptions. A strike at Antofagasta’s Centinela copper mine in Chile is expected to impact output starting in November, adding to supply risks. Other LME metals also saw gains, with aluminium, zinc, lead, tin, and nickel all rising.
The cash copper contract on the LME ended Thursday at a $97 premium to the three-month contract, highlighting ongoing supply tightness. The situation underscores the delicate balance between demand and supply in the copper market, with potential disruptions looming on the horizon.