Copper surges to $10,700/t on LME, rises $400/t w-o-w as supply tightens

• Copper stays bullish amid tight supply, mine disruption
• BHP’s Olympic Dam investment reinforces trust in long-term demand

The benchmark three-month copper contract on the London Metal Exchange (LME) closed at $10,700/t on 4 October 2025, marking a gain of $400 from 26 September. The move reflects a confluence of bullish forces — tightening supply, falling inventories, steady demand, and supportive currency trends.

The key trigger behind the latest rally has been the production disruption at Freeport’s Grasberg mine in Indonesia. The mudslide incident in September led to a temporary shutdown of operations, with the company declaring force majeure on copper concentrate deliveries. Market estimates suggest a potential loss of 500,000-600,000 tonnes of global copper supply, roughly 2–3% of annual mine output. With such a large producer offline, the market quickly repriced expectations for a deeper deficit through 2026.

Adding to the bullish sentiment, LME copper stocks have declined sharply. Inventories have dropped to around 135000-145,000 tonnes, compared with more than 320,000 tonnes at the start of the year — a reduction of nearly 50%. This tightening inventory cushion means any additional supply shock or demand uptick exerts an outsized impact on prices.

BHP has announced a US$555 million (A$840 million) investment to boost its Olympic Dam copper operations in South Australia, marking a major step toward expanding its refined copper capacity over the next decade. The funding will go toward infrastructure upgrades, including a new underground access tunnel, an advanced backfill system, expanded ore handling capacity, and an oxygen plant to improve smelting efficiency.

This investment sets the stage for a larger expansion decision expected by 2027, which could eventually lift Olympic Dam’s refined copper output to 500,000-650,000 tonnes per year in the 2030s. The move highlights BHP’s growing focus on copper as a core pillar of its energy transition strategy, driven by surging demand for the metal in renewable energy, EVs, and power grid development.

Outlook

In the near term, copper is likely to stay firm to mildly bullish. Supply risks-especially from the Grasberg mine disruption—and weak inventories will keep the upside alive. However, gains may be tempered by macro headwinds like a stronger dollar or slowing global demand.

Indian buyers may keep paying premiums for clean scrap, while global futures could test resistance near $10,900-11,000/t if the momentum holds.