Financial Forecast, Nov 13

Copper prices extended their record-breaking rally on September 8, with benchmark three-month copper on the London Metal Exchange rising to a fresh record of around $14,728/mt. Copper prices have continued to strengthen amid concerns over constrained mine supply, tight availability of metal outside the US and uncertainty surrounding potential US trade restrictions on refined copper. The rally was also reflected in the US market, where COMEX copper futures reached record levels around $6.78/lb. Copper prices in both London and New York have been supported by a combination of tightening supply expectations and tariff uncertainty, which has encouraged large volumes of refined copper to move toward the US market. According to foreign media reports citing preliminary data from the International Copper Study Group (ICSG), global copper mine production declined 1.1% year on year in H1 2026, with weaker production reported across several major producing countries. The decline has reinforced concerns over raw-material availability at a time when the copper concentrate market is already exceptionally tight. At the same time, uncertainty surrounding potential US tariffs on refined copper continues to reshape international trade flows. Large volumes of copper have accumulated in the US as traders and consumers position themselves ahead of possible policy changes, while inventories available in other major consuming regions have remained comparatively constrained. This geographical imbalance has contributed to tighter physical conditions outside the US even as global exchange inventories remain elevated. Copper’s latest record reflects a combination of weaker mine supply, tight concentrate availability and distortions in refined-copper trade flows rather than a single supply event. The decline in global mine production during H1 has added to concerns that concentrate availability could remain constrained, particularly as smelters continue to face historically weak treatment-charge conditions. However, the current market tightness is not evenly distributed. Large volumes of refined copper have accumulated in the US, while availability in other markets remains tighter. As a result, the location and accessibility of inventories have become increasingly important factors influencing copper prices. In the near term, copper prices are likely to remain sensitive to further mine disruptions, changes in US trade policy and movements in exchange inventories. Continued weakness in mine production or further tightening in physical availability outside the US could provide additional support to prices, while a reversal of US-bound copper flows could ease some of the current geographical imbalance.

Morgan Stanley has lowered its global copper ore supply growth expectations to basically flat or even declining. The logic behind copper prices hitting new highs is shifting from short-term "panic buying" to a resonance of tightening supply and growing demand: Chilean production remains under pressure; meanwhile, demand expansion from data centers, energy transition, and other sectors further reinforces the tight supply-demand balance.