Copper prices are set for a monthly gain, having risen more than 14% so far in 2026, reaching $6.4930 a pound ($14,224 a tonne) for September delivery on Comex. This surge is attributed to increasing signs of tight physical supply, with LME inventories falling over 10,000 tonnes this week to 262,300 tonnes, and China's import premiums hitting their highest since 2022. The market is also experiencing backwardation, where nearby LME contracts trade at a premium, signaling near-term scarcity. More than 60% of current LME copper stocks, which are at 255,400 tonnes, are under cancelled warrants, indicating their eligibility for removal, further suggesting a tightening market.
Supply problems are compounding, with Codelco, the world's largest copper miner, abandoning its goal to return to pre-pandemic production levels and warning of another difficult year. They now expect no more than 1.357 million tonnes by 2026. Deadly storms in Chile, the world's largest copper producer, have caused disruptions and the International Energy Agency has warned that sulphuric acid shortages could impact over a seventh of global output. Analysts like Natalie Scott-Gray from StoneX note that inventories on both the LME and Shanghai Futures Exchange are below their five-year averages, signifying "real world physical tightness."
Despite macroeconomic and geopolitical headwinds, most metals on the LME are heading for modest monthly gains in July. The strong demand from China this month has also supported copper prices, although Ewa Manthey, commodities strategist at ING, expects Chinese buying to ease in August. The U.S. market holds nearly two-thirds of visible global inventories, with COMEX copper stocks at a record 644,465 metric tons, almost double the combined LME and ShFE inventories, as metal flows to the U.S. ahead of potential import tariffs. Miner stocks, including Teck Resources, Anglo American, Glencore, Freeport-McMoRan, Southern Copper, Rio Tinto, and BHP, have rallied on strong earnings and increased copper exposure.
