Copper prices rallied for a fifth consecutive session on Monday, pushing the metal back toward all-time record highs as tightening physical availability in Asian markets and inventory bottlenecks in the United States converged to re-ignite buying momentum.
Comex copper for December delivery gained up to 3.3% to touch $6.8410 per pound in New York, while three-month copper on the London Metal Exchange rose to $14,710.50 per tonne. The price rebound comes after a brief retreat from the record high of $14,875 set on September 10, when hawkish messaging from the Federal Reserve and ongoing uncertainty surrounding US import tariffs temporarily curtailed speculative long positions. However, physical market indicators in Asia and Europe demonstrate that underlying spot availability remains constrained despite high global stock figures.
Comex Warehouses Reach Capacity as LME Swings to Backwardation
A growing divergence between exchange storage locations has emerged as a central driver of the market rally. Comex warehouses in the United States currently hold 696,204 tonnes of copper—accounting for approximately 69% of all exchange-monitored global stocks—following an aggressive wave of imports by traders attempting to front-run anticipated US tariffs. However, that stockpile has stopped expanding, marking its first weekly decline since April as key hub facilities at the Port of New Orleans reach maximum storage capacity. With another 100,000 tonnes of South American and African metal scheduled for delivery through October, the US market is running out of physical room to absorb incoming shipments.
Conversely, available inventory on the London Metal Exchange is shrinking rapidly. While total LME warehouse stocks stand at 255,900 tonnes, roughly 45% of that volume (115,450 tonnes) consists of cancelled warrants already earmarked for physical delivery. On-demand available metal has consequently dropped to 133,725 tonnes. This tightness caused cash copper on the LME to flip to a $26 per tonne premium over three-month futures, reversing an $86 contango discount recorded just one week prior and signaling immediate physical demand from buyers unable to defer delivery.
Chinese Holiday Restocking Drives Demand Amid Smelter Maintenance
Physical demand in Asia has strengthened ahead of China’s mid-autumn and Golden Week holiday period. Chinese fabricators have stepped up spot buying to replenish raw material inventories, driving the Yangshan copper premium to $124 per tonne—its highest level in nearly four years—before settling near $119 per tonne.
Supply constraints inside China are expected to persist through the fourth quarter. Planned maintenance across several domestic smelters during October and November will limit cathode production, while ongoing port congestion near Shanghai continues to delay the entry of imported concentrate and refined metal into the domestic supply chain.
Global Mining Setbacks Compound Long-Term Supply Tightness
The rally in physical metal prices contrasts with a subdued performance among major mining equities, which faced profit-taking following early September highs. However, operational disruptions at major primary mines continue to underpin the market’s bullish long-term fundamentals. Unexpected production cuts at Freeport-McMoRan’s Grasberg operation in Indonesia and Ivanhoe Mines’ Kamoa-Kakula mine in the Democratic Republic of Congo have removed an estimated 600,000 tonnes of copper from anticipated 2026 supply.
Major diversified miners have also reported headwinds. BHP saw output at its Escondida mine in Chile fall 22% in July, contributing to an overall 9.4% drop in Chilean national copper production for the month. Concurrently, state producer Codelco has delayed key restructuring initiatives, and smelter restarts in Zambia have experienced extended delays. Analysts note that these cumulative supply shocks could result in a year-on-year decline in global mined copper production for the first time since 2017.
Market Impact
○ Impacted Metals: LME Grade A Copper Cathodes, Comex High Grade Copper Cathodes, High-Grade Copper Scrap
○ Direction: Bullish
○ Time Horizon: Near-term
○ Affected Industries: Electrical Grid, Automotive, Construction, Electronics, Power Generation
○ Related Price Reports: Copper Weekly Price Report
○ Watch Item: Procurement managers should monitor whether the LME cash-to-three-month premium widens further after Chinese golden week holidays, signaling persistent spot tightness in Asia.
SuperMetalPrice Commentary:
The rapid swing into backwardation on the London Metal Exchange highlights how quickly paper markets reprice when physical inventory becomes structurally trapped in regional delivery hubs. With US Comex storage virtually capped out due to tariff hedge stockpiling, accessible global supply is far tighter than headline exchange stock figures suggest.
Should Chinese fabricators continue paying elevated spot premiums into the fourth quarter while major primary mines in South America and Africa struggle with production targets, copper prices are well-positioned to break through past record highs and test new territory before year-end.
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