LME copper prices rise w-o-w despite increase in inventories

• Market driven by forward supply risks, not current stocks
• Chile’s copper production declines by 5% y-o-y in Feb’26

Copper prices on the London Metal Exchange (LME) edged higher by $230/tonne (t) over the past 10 days, climbing from $12,120/t on 27 March to $12,350/t at the time of reporting (11:40 IST) on 6 April 2026, indicating a steady but sentiment-driven recovery rather than a sharp rally. The price movement reflects persistent concerns over tightening availability in the physical market, which was partly tempered by selective buying interest from Asia.

However, the price increase comes despite a marginal build in LME inventories, which increased 4,000 t to 364,000 t from 360,000 t. The inventory build of 4,000 t w-o-w suggests that supply is gradually returning to exchange warehouses, particularly in Europe, where inflows have offset earlier drawdowns seen in Asian locations. This divergence between price movement and inventory trend reflects the influence of forward-looking sentiment rather than immediate physical scarcity. In fact, the rise in stocks has limited the pace of the rally, preventing a sharper upside.

On the supply side, Chile reported a nearly 5% y-o-y decline in copper production in February, driven by operational disruptions and adverse weather conditions. Despite this, the impact of lower mine output has not translated into tightness in refined copper supply due to already high visible inventories.

Japan update

Sumitomo raises copper output guidance on operational normalisation

Sumitomo Metal Mining, a leading Japan-based integrated non-ferrous metal producer, plans to raise its electrolytic copper output by 8.2% y-o-y to 446,000 t in FY’27 (1 April 2026-31 March 2027), driven by the normalisation of operations following maintenance disruptions in the previous fiscal. Output was impacted in FY’26 due to scheduled repairs at the Toyo smelter (Ehime Prefecture).

The production split is projected at 223,000 t each in H1 and H2, with growth of 3.7% in H1 and a sharper 13.1% increase in H2, indicating stronger recovery momentum in the latter half of the year.

India update

Hindustan Copper Limited has approved an INR 469.55 crore project to establish a 3.0 mnt/year copper concentrate plant at its Malanjkhand mine in Madhya Pradesh. The company currently has an ore production capacity of around 4 mnt/year, which is planned to expand to around 12.2 mnt/year in phases. The new plant will enhance processing efficiency, with the engineering, procurement, and construction (EPC) contract awarded to Ardee Engineering.

Outlook

Copper inventories on the LME have risen sharply this year, from 145,000 t in January to 364,000 t now, a 219,000 t increase in three months. Most of the build came from Europe, balancing earlier declines in Asia. This large increase is keeping the market cautious, but some buying and adjustments are supporting prices. The near-term direction will depend on whether inventories start to fall or continue rising.