LME copper prices rise again w-o-w to nearly 16-month peak

• Prices surge on tight supply, stronger Chinese demand
• Codelco’s premium reaches record peak of $325-345/t

The benchmark three-month copper contract on the London Metal Exchange (LME) reached a 16-month high this month for the second time, closing at $10,950/tonne (t) on 24 October 2025, up 3% w-o-w. The sharp rally was driven by tight mine supply, resilient physical demand, and renewed optimism from industrial data in China, alongside support from a weaker US dollar and declining exchange inventories.

Market scenario

Tight supply drives price surge

Supply-side constraints remain the dominant driver of the price surge. Key producers, including Antofagasta and Freeport-McMoRan, have reported operational challenges this quarter, while output from major South American mines continues to be weighed down by lower ore grades and logistics disruptions. Antofagasta cut its full-year production outlook to the lower end of its 660-700 kt range, signalling persistent supply tightness into early 2026. Similarly, Freeport-McMoRan’s output fell 13% y-o-y, although higher market prices helped offset the decline in volumes.

Refined copper premiums jump

Meanwhile, refined copper premiums in Europe surged, reinforcing signs of constrained availability. Codelco’s 2026 premium offers touched a record $325-345/t, their highest ever, as buyers competed for limited cathode supply. This surge reflects Europe’s growing dependence on imported material and the global shortage of high-grade copper units. LME warehouse inventories also mirrored this tightening trend — on-warrant stocks slipped below 125,000 t in mid-October, nearly 20% lower than September levels, deepening concerns over near-term supply.

Consumption sees recovery

On the demand side, copper continues to benefit from a broader global recovery. While Chinese consumption remains steady, incremental growth is now emerging from the US and India, supported by infrastructure spending, renewable energy investments, and electric-vehicle expansion. China’s September industrial production rose 5.2% y-o-y, signalling renewed stability in its manufacturing base and boosting market sentiment.

Outlook

Looking ahead, analysts expect LME copper to test the $11,000/t mark in the short term, underpinned by robust end-user demand and constrained mine output. However, volatility may persist as traders weigh macroeconomic risks against the metal’s strong fundamentals and its pivotal role in the global energy transition.