Copper Prices Surge for Sixth Consecutive Day

Copper saw an increase for the sixth day in a row on Tuesday, marking its longest consecutive gains in four months. This uptick was largely driven by Chinese buyers who were stocking up ahead of upcoming holidays, alongside dwindling inventories observed in Shanghai and London, signaling a tightening physical market.

Specifically, the December contract for Comex copper, which is the most actively traded, rose by as much as 1.6% to $6.8710 per pound in New York. By late morning, it was trading at $6.8370 (approximately $15,070 per metric tonne), showing a daily increase of 1.1% and edging closer to its record closure of $6.8885 reached on September 9. That peak was abruptly followed by a more than 5% drop after a report indicated that the White House’s tariff plans had encountered delays.

Meanwhile, on the London Metal Exchange, the benchmark three-month copper price rose by 0.7% to $14,766 per metric tonne by mid-afternoon in London, remaining less than 1% short of the September 10 high of $14,875. This situation has kept the premium for New York copper at over $300 per tonne. In contrast, the most traded contract on the Shanghai Futures Exchange also saw a rise of 1.2%, reaching 111,320 yuan ($16,616) per tonne.

Data suggests that copper stocks in SHFE warehouses have diminished by 70% since early June. Additionally, inventories of cathodes in Shanghai, a central hub for trading and consumption, dropped to 43,900 tonnes last week, marking the lowest level seen in 2023, according to Shanghai Metals Market. The influx of imported metal in the country has primarily gone directly to fabricators rather than being stored, leading to the Yangshan premium for delivered copper hitting its highest point in nearly four years.

Ewa Manthey, a commodities strategist at ING, noted that tightening physical market conditions in China are providing a stabilizing effect on copper prices. Factors such as falling inventories and seasonal restocking seem to counterbalance uncertainties around U.S. tariffs. Sandeep Daga from the Metal Intelligence Centre pointed out that Chinese purchases are on the rise, especially as the market prepares for holidays and upcoming smelter shutdowns. The Chinese markets will observe breaks from September 25 to 27 and again from October 1 to 7.

London Faces Shortages

On Monday, cash copper had a $62 per tonne premium over the three-month contract, increasing from $26 in the previous session, and rising from an $86 discount one week prior. This dynamic indicates that buyers are rushing for immediate delivery. The volume of cancelled warrants, representing metal already reserved for withdrawal from LME warehouses, rose by an additional 6,700 tonnes to 122,150 tonnes, constituting 48% of the total available amount.

In stark contrast, warehouses monitored by Comex are holding 696,204 tonnes, translating to about 69% of all exchange-monitored copper. This surplus follows a rush of imports in anticipation of tariffs that have yet to be implemented. Interestingly, this inventory has halted its growth, as stocks experienced a decline for the first time since April. Reports suggest that storage facilities in the Port of New Orleans, the primary delivery location for Comex, are nearing their capacity. With another 100,000 tonnes of copper from Africa and South America expected soon, the U.S. might struggle to accommodate additional imports.

There are mixed opinions about how much further the copper rally can extend. Some industry experts are cautious; for instance, Robert Montefusco from Sucden Financial mentioned he feels the current prices are somewhat inflated. He speculated that if prices continue to rise, numerous producers in China may begin to sell, skeptical about whether the prices could maintain their levels. Additionally, Mike McGlone from Bloomberg Intelligence warned last week that a market correction could potentially decrease copper prices by 20% to 30%.

Meanwhile, traders are keenly watching the forthcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping for potential implications on trade, as well as signals regarding the state of the economies in the two largest countries globally. Also significant is the recent quarter-point hike by the Federal Reserve, the first since 2023, with the possibility of further increases impacting industrial metals.

Copper Miners Recover Some Losses

Tuesday saw copper producers also benefit from the price increase, recovering some of the ground lost after the sell-off following the September 10 peak. For instance, Freeport-McMoRan, the largest publicly traded copper producer, rose 1.8% to $73.48 in New York. This move bolstered its market capitalization to $105.5 billion, reducing its September loss to 3%. Challenges in its Grasberg operations in Indonesia, alongside output reductions at Ivanhoe Mines’ Kamoa-Kakula in Congo, have collectively cut about 600,000 tonnes from this year’s anticipated global supply, possibly leading to a decrease in mined copper production for the first time since 2017, according to Sprott Asset Management.

Southern Copper also increased by 1.8%, reaching a market value of $170.2 billion, extending its lead over Rio Tinto, now valued at $164.3 billion after a 0.5% decrease. Southern Copper has seen a 6.5% increase over the week but is still down 3.5% for the month. First Quantum Minerals rose 3.1% in Toronto, bringing its valuation to $27.5 billion, representing an 11% increase over the past week following the acquisition of a UK patent for a new hauling system. Lundin Mining gained 2.6% to reach a value of $21.6 billion, up 10.5% for the week, and Ivanhoe Mines increased by 2.7% to $12.9 billion despite a recent downgrade.

Teck Resources edged up 1.2% in New York, valuing the company at $33.2 billion as it awaits Chinese approval for its $53 billion merger with Anglo American, which gained 1.3% in U.S. trading. Glencore, an influential partner at Collahuasi, is in between the merged entity and potential $1.4 billion annually from copper synergies that could arise from the integration plans with Teck’s Quebrada Blanca site.

Antofagasta experienced a 2.8% gain in over-the-counter trading in New York, nudging its value to $51.1 billion, an 8% increase for the week despite having revised down its forecasts for 2026 following adverse winter weather in Chile. Poland’s KGHM also saw a 2% rise.

On the flip side, diversified major players lagged slightly. Glencore’s U.S. shares dipped by 0.7%, leaving the Swiss firm with a valuation of $84.5 billion, down 10% for the month amidst issues regarding its dealings with iron ore trader Radiant World. BHP, now valued at $220.9 billion, inched up 0.4%, although it remains 8% lower in September after production at its Escondida mine in Chile fell by 22% in July.

This year, Comex copper has surged 21% and is currently less than 1% off its all-time closing high.