Key Takeaways
- Copper prices dropped 0.7% to $14,319.50 a metric ton.
- LME inventories climbed by 11,475 tons, up 8% in a week.
- Global copper stocks are high, with large amounts in the United States.
Copper prices fell by 0.7% to $14,319.50 a metric ton on Wednesday, according to the London Metal Exchange (LME). This decline followed an increase in inventories and a reduction in supply concerns, despite producers offering record premiums for next year’s physical deliveries.
The most-traded November copper contract on the Shanghai Futures Exchange closed 0.2% higher at 109,390 yuan ($16,379.43) a ton, reflecting the global market dynamics.
LME inventories increased by 11,475 tons, marking a 40% rise in available stocks over the past week. This surge in inventory levels has raised concerns about the global copper market’s surplus, with analysts predicting surpluses for the next few years.
Alice Fox, an analyst from Macquarie, stated, 'At this price level, copper is way above where it ought to be given global stocks.' This suggests that the current price does not reflect the actual supply and demand balance in the market.
While global copper inventories are high, a significant portion of these stocks is located in the United States, leading to regional shortages in Europe. Buyers in Europe face record premiums for 2027 deliveries, with Chile’s Codelco offering a record-high premium of $350 per ton over the LME price.
The United States has been a major destination for copper shipments since February 2025, when Washington launched an investigation into copper imports. This has resulted in American warehouses holding roughly 70% of global exchange-visible inventories.
Nickel was the best performer on the LME, advancing 2.1% to $15,985 a ton. The catalyst for this rise is the prospect of coordinated production cuts by Chinese producers operating in Indonesia. Top producer Indonesia is discussing a plan to impose a moratorium on the development of new nickel processing facilities.
Among other metals, LME aluminium rose 0.5% to $3,016 a ton, lead added 0.4% to $1,901, zinc edged down 0.2% to $3,716.50, and tin eased 0.3% to $51,195.
At this price level, copper is way above where it ought to be given global stocks.
Alice Fox, Analyst, Macquarie
