Copper maintained its gains as traders evaluated a tight supply situation and a resurgence of buying interest in China. Benchmark futures saw an increase of up to 0.5% in morning trading on Monday, building on an impressive run of 11 advances in the past 12 weeks through Friday.
Adding to the supply concerns, multiple copper refineries in China are slated for planned maintenance shutdowns between October and November. This scheduled maintenance, according to Shanghai Metals Markets, is expected to restrict any significant increase in the availability of the metal during that period. This comes amidst reports of global mine copper production facing its first decline in nearly a decade, affected by production disruptions and falling ore grades.
Last Friday night, LME copper closed at $14,563 per metric ton, marking a 0.62% increase. The most-traded SHFE copper 2610 contract also closed higher at 109,900 yuan per metric ton, up 0.34%. These price movements indicate a bullish sentiment, with increased positions by bulls in LME copper and reduced positions by bears in SHFE copper.
Sprott Asset Management highlighted that despite copper prices reaching record highs, global mine copper production is projected to decline by 1.1% year-over-year in the first half of 2026. Production disruptions at major mines, including Freeport-McMoRan's Grasberg and Ivanhoe Mines' Kamoa-Kakula, are estimated to reduce 2026 production by approximately 600,000 metric tons, or about 2.5% of annual global output. Jacob White of Sprott noted that while higher prices can improve project economics, they cannot expedite the lengthy development cycle for new copper mines.
In addition to supply constraints, demand is being driven by growing needs from power grids, AI data centers, and national defense. Spot prices in Shanghai and Guangdong also reflected the tight supply, with SMM #1 copper cathode spot prices in Shanghai quoted at premiums of 660-810 yuan per metric ton. Suppliers in Guangdong actively held prices firm, leading to sharp increases in premiums, indicating strong underlying demand despite high copper prices.
