Three-month copper futures on the London Metal Exchange (LME) traded at $14,446 a tonne on Tuesday, rising 0.2 percent by 12:50 p.m. London time. This followed a vote by workers at Antofagasta's Centinela mine in Chile to strike, potentially disrupting supply. The metal reached a record high of $14,875 earlier in September.
Copper is set for a third consecutive monthly advance, with prices increasing approximately 9 percent in September. Workers from two unions, Minera Esperanza and Distrito Centinela, at the Centinela operation rejected the company’s final contract offer on Monday. The unions reported 98.73 percent of eligible members voted in favor of a strike on Sept. 28.
This strike vote initiates a mandatory mediation period before any walkout can begin. Further compounding supply concerns, wage negotiations at BHP’s Escondida mine, the world’s largest copper producer, faced delays following a fatal accident at the site.
Supply tightness is evident in market dynamics beyond labor disputes. Significant volumes of refined copper have accumulated in U.S. warehouses, driven by traders anticipating a possible import tariff. This stockpiling behavior has reduced the metal readily available for purchase in other global markets.
Demand indicators also signal a constrained market. China’s Yangshan import premium, a key measure of demand for overseas cop is near its highest level since 2022. This premium reflects strong Chinese appetite for imported copper despite global supply pressures.
Deutsche Bank projects copper prices will climb to approximately $22,000 a tonne by the second quarter of 2027. This forecast assumes intensified competition for available supplies will continue to drive prices higher over the medium term.
Data from the International Copper Study Group (ICSG) supports this outlook of tightening fundamentals. Global mine production registered an annualized 23 million tonnes in July, marking a 4 percent decrease from June figures. This decline in raw material extraction contributes to overall supply deficits.
The ICSG also reported that refined copper demand increased 3 percent from a year earlier, reaching an annualized 29 million tonnes. Concurrently, refined supply slipped 1 percent to 28.4 million tonnes. This disparity between rising demand and contracting supply creates a structural deficit in the market.
A potential counter-argument to sustained price increases involves new supply sources. The Trump administration has signaled it is nearing approval for permits to mine the deep sea. However, the timeline for such operations to yield significant commercial supply remains a longer-term consideration, not an immediate mitigation for current market tightness.
