- High copper prices, subdued Indian demand, limiting fresh purchases
- Fed rate-cut expectations support copper, easing dollar pressures
LME copper prices remained firm in the week ended 13 August 2026, edging down marginally from $14,092/t to around $14,082/t after six consecutive weeks of gains. Prices remained elevated near record levels as tightening global supply, tariff-driven trade flows and easing expectations for U.S. interest-rate hikes continued to support the market.
Meanwhile, LME copper inventories fell around 7% w-o-w to 207,725 t, extending the ongoing drawdown and reaching levels around 32% lower m-o-m. The persistent decline in exchange stocks highlighted tightening physical availability and continued to support elevated copper prices despite limited weekly price movement.
Market sentiment remained constructive as expectations of fewer U.S. Federal Reserve rate hikes supported risk assets and reduced concerns over metals demand. Softer-than-expected U.S. employment data further eased inflation concerns, while the weaker interest-rate outlook provided additional support to copper. However, prices remained volatile as traders continued to assess the sustainability of the recent rally.
U.S. tariff expectations remained a major influence on global copper trade flows. Large volumes of physical copper continued moving into the U.S. ahead of a potential 15% tariff on refined copper from January 2027, following the existing 50% levy on semi-finished copper products. The resulting COMEX-LME premium has tightened copper availability outside the U.S. and increasingly become a gauge of future tariff risk.
Supply fundamentals remained supportive, with the global copper market facing a deepening deficit and limited scope for rapid mine-supply growth. Codelco’s declining production and the long development timeline of new mines, averaging around 17.5 years from discovery to production, highlight persistent structural supply constraints.
Indonesia also faced near-term disruption after PT Smelting suspended operations following a boiler leak, while Freeport’s Manyar smelter is expected to restart in September as Grasberg gradually recovers.
Looking ahead, structural demand from electricity-grid expansion, AI data centres, electrification and defence spending is expected to support copper consumption. Although the recent rally has lifted prices significantly, continued inventory drawdowns, constrained mine supply and tariff-driven U.S. stockpiling are likely to keep the market tight and prices elevated, with volatility remaining high.
Global updates
Chile’s copper output set to decline in 2026
Chile’s copper production is forecast to decline 2.6% to 5.27 mnt in 2026, mainly due to weaker output at Codelco and BHP’s operations. Production is expected to recover to 5.55 mnt in 2027 as key mines improve operations and ramp up output.
Indonesia’s copper shipments face delays amid Gresik smelter outage
Indonesia’s copper shipments are facing delays following an outage at PT Smelting’s Gresik facility, tightening near-term refined copper availability. The disruption comes as Grasberg mine production is still recovering from last year’s mudflow incident, limiting concentrate availability for Indonesian smelters. PT Smelting is expected to resume normal operations after repairs, while Freeport’s Manyar smelter is targeted to restart in September 2026 and gradually ramp up as concentrate supplies improve.
India updates
India’s copper demand is projected to rise from around 2 mnt in 2026 to 3 mnt by 2030, while concentrate availability remains a key supply challenge, with imports reaching 0.60 mnt in 4MCY’26, up 62% y-o-y.
To strengthen domestic supply, Hindustan Copper Ltd (HCL) is investing INR 7,188.90 crore to raise ore production capacity to 12.2 mnt/year by FY30, from around 4.21 mnt. HCL is also developing a 3 mnt copper concentrator at Malanjkhand and expanding existing mines, supporting its Vision 2030 strategy.
Meanwhile, discussions with Chile’s Codelco on concentrate sourcing and potential mining partnerships could help address India’s growing feedstock requirements. As refining capacity expands, securing long-term overseas offtake agreements and mining investments will remain critical to narrowing India’s copper supply gap.
Market sentiment remained cautious to weak in India, with elevated copper prices, high procurement costs and seasonal demand weakness discouraging inventory accumulation. Lower operating rates among wire and cable manufacturers further reduced consumption, while buyers largely adopted a hand-to-mouth purchasing strategy, limiting purchases to immediate requirements and resisting higher offers.
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