Copper prices on Tuesday reached $14,783 per ton on the London Metal Exchange, reflecting a 0.8 percent increase compared to the previous day. This price is only $92 away from the historical record of $14,875 set on September 10. In New York, the price of copper for December delivery reached $6.871 per pound, just 2 cents shy of the record $6.8885 on September 9.
Declining inventories in Shanghai and increasing demand
Copper cathode inventories in Shanghai fell to 43,900 tons last week, marking the lowest level since 2023. Additionally, inventories in Shanghai Futures Exchange warehouses have decreased by 70 percent since early June. In this situation, Chinese buyers have aggressively begun stockpiling, as markets in China will soon close for the national holidays.
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Supply pressures and their impact on prices
Globally, it appears that mined copper production may decline this year for the first time since 2017. Disruptions in major mines such as Grasberg in Indonesia and Kamoa-Kakula in Congo have reduced about 600,000 tons from the projected output in 2026. On the other hand, copper prices in London have decreased by $86, with a $62 premium over the three-month contract, due to immediate buyer demand.
Moreover, copper inventories in U.S. COMEX warehouses have reached approximately 696,000 tons, accounting for nearly 69 percent of the total copper monitored by the exchange. These inventories decreased last week for the first time since April. Additionally, it seems that production at the Escondida mine, the largest copper mine in the world, may be affected by negotiations with the labor union.
This increase in copper prices reflects strong demand from global markets, especially China, which is currently facing declining inventories. Furthermore, forecasts regarding changes in trade policies between the United States and China, as well as their impact on copper demand and supply, could influence price trends.
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