- Chile records weakest Q2 copper output in 19 years
- Rising concentration of exchange stocks in US tightens global supply
LME copper remained firm in the week ended 31 July, with the three-month contract hovering in the $13,700-13,800/t range as tightening physical fundamentals underpinned prices, while renewed Middle East tensions added support through higher freight cost expectations.
LME copper inventories declined by 9.7% w-o-w to 249,850 t, extending the drawdown in available stocks. Although some cancelled warrants were returned to LME warehouses during the week, readily available copper outside the US remained scarce. The limited supply of prompt-delivery metal continued to support physical premiums and kept the nearby market tight.
China’s physical market also strengthened further during the week. SHFE copper inventories fell another 12.9% w-o-w to their lowest level since February 2024, while Yangshan import premiums remained elevated, indicating sustained demand from fabricators despite historically high prices.
Trade flows continued to be distorted by uncertainty over potential US tariffs on refined copper imports. Traders maintained shipments into the US ahead of any policy decision, resulting in the country holding around 58% of visible global exchange inventories. The concentration of stocks in the US reduced copper availability across Europe and Asia, lifted regional physical premiums, and intensified competition among consumers.
Overall, market sentiment shifted towards physical fundamentals, with participants focusing on tightening inventories, resilient Chinese demand, and constrained regional availability rather than interest-rate expectations or geopolitical headlines.
Global updates
Chile sees weakest Q2 copper output in nearly two decades
Chile, the world’s largest copper producer, recorded its weakest second-quarter copper output in 19 years, producing 1.24 mnt during the first half of 2026. The decline was primarily driven by lower ore grades, operational disruptions, and slower-than-expected recoveries at several major mines, despite LME copper prices trading above US$13,000/t for much of the quarter.
South Korea and Chile strengthen copper partnership
South Korea and Chile signed five MoUs to deepen cooperation in the supply chains of copper, reinforcing their long-term strategic partnership in critical minerals. The agreements focus on expanding collaboration in mining, mineral processing, technology exchange, and investment to secure a stable supply of raw materials for South Korea’s electric vehicle and battery industries.
India updates
As per BigMint’s assessment, ex-Mumbai copper cathode prices eased by 1.1% w-o-w to around INR 1,333,000/t from nearly INR 1,348,000/t a week earlier, while Ahmedabad prices declined by 1.1% w-o-w to around INR 1,335,000/t from INR 1,350,000/t.
The marginal correction in domestic copper prices was primarily driven by subdued buying activity despite firm LME prices. Downstream consumers, including wire and cable manufacturers, continued to procure material only against confirmed orders, limiting spot market activity amid elevated price levels.
Outlook
Copper prices are expected to remain well supported in the coming weeks as tightening physical market conditions continue to outweigh broader macroeconomic concerns. The continued weakness in Chilean mine production is likely to delay any meaningful improvement in global copper supply, providing ongoing support to physical premiums.
US tariff uncertainty is also expected to keep copper premiums elevated and continue influencing global trade flows, with market participants awaiting greater clarity on the proposed import measures.
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