Copper: about US$14,370/t on COMEX, US$14,250/t on LME
Copper ends the week near a two-week low. COMEX is about 3% lower on the week, and LME closed at US$14,253.50/t on 1 October, about 4% below its September record. A fading US tariff premium and a hawkish Fed outweighed fresh supply risk in Chile, where Escondida’s supervisors have voted to authorise strike action. The metal is still up about 30% year on year after a third-quarter gain of more than 4%. In Australian dollar terms, LME copper is around A$20,600/t.
Market overview
September was a round trip. Early in the month COMEX hit an all-time high of about US$15,100/t and LME a record US$14,875/t. Both were driven by bets that Washington would extend tariffs to refined copper. On 10 September the White House said no decision had been made. COMEX fell more than 4% intraday, and Freeport-McMoRan dropped 8% in pre-market trade.
The tariff premium has since largely deflated. At about US$14,480/t, COMEX now trades only marginally above LME. At end-July the gap was about US$420/t, roughly eight times its 20-year average.
Outside the US, the physical market remains tight. The LME prompt spread widened to a monthly high last week as Chinese smelters scheduled Q4 maintenance. The prompt spread is the price gap between copper for immediate delivery and copper for later delivery; a wider premium on nearby metal means buyers are paying up to get copper now, a sign of tight supply. Chinese inventories are low heading into the Golden Week holiday (1–8 October). Visible stocks remain concentrated in the US: COMEX warehouses hold about 700,000 tonnes (770,000 short tons), up from about 290,000 tonnes a year ago.
Macro and policy themes
The Fed has turned from tailwind to headwind. On 16 September the FOMC voted 12–0 to raise rates by a quarter of a percentage point to 3.75–4.00%, its first hike since 2023. Chair Warsh cited inflation running above 3% all year and oil-driven price pressure from the Middle East, with Brent near US$97/bbl. Fed officials now expect one more rate rise before year-end. US 10-year yields near 5.3% raise the cost of carrying stockpiled metal and dampen speculative appetite. A weaker US dollar limits the damage, as it makes copper cheaper for overseas buyers.
China’s data improved at the margin. The official manufacturing PMI rose to 50.1 in September from 49.8, its first expansion in three months. The production sub-index hit a 2026 high of 51.7, and the non-manufacturing PMI rebounded to 50.2. Underlying demand is still soft, however. Industrial profit growth slowed to 15.7% for January–August, and August alone grew just 4.2%, the weakest since November 2025.
Impact of US tariffs
The refined-copper tariff deadline has passed with no decision, and the market is treating that as a soft no for now. Since August 2025, a 50% Section 232 tariff has applied to semi-finished copper products such as pipe, wire, rod and sheet. Cathode has been exempt. Commerce delivered its updated assessment on 30 June, and the 90-day window implied a presidential decision by 28 September. That date passed without an announcement.
The effects are visible in prices and flows:
- Arbitrage: The COMEX–LME spread has narrowed, weakening the pull of metal into the US.
- Stranded stocks: Policy uncertainty keeps the US stockpile anchored. Goldman’s mid-year estimate has total US copper inventories rising by about 900kt in 2026 to roughly 1.8Mt. That total includes off-exchange and other non-COMEX stocks; COMEX warehouses hold about 700kt of it.
- Upside scenario: A phased tariff (15% from January 2027, rising toward 30%) would quickly re-widen forward premiums and restart inflows.
- Downside scenario: Morgan Stanley flags an explicit rule-out as the key downside risk. It could release US stocks back into a tight ex-US market.
Watch for any White House statement and for COMEX warehouse outflows.
China: the scrap invoicing bottleneck
China’s scrap squeeze is a paperwork problem, not a shortage of metal, and it is pushing demand toward refined cathode. CRU (25 August) finds the constraint lies in securing VAT-compliant material. Under the reverse-invoicing regime, recyclers can invoice on behalf of individual sellers only up to RMB5 million a year per seller. At current prices, that covers only around 50–60 tonnes of copper.
CRU’s key findings:
- Scale: Invoicing limits kept an estimated 400–800kt of scrap out of the formal market in January–July 2026.
- Losers: Anode producers and scrap-fed wire rod mills face lower utilisation and shutdowns.
- Relative winners: Cathode-fed producers.
- Imports: These give only partial relief. Competition for overseas scrap is rising, and some supplier countries restrict exports, which leaves buyers more exposed to global price swings.
- Structure: A persistent bottleneck could accelerate consolidation and formalisation across the scrap chain.
For the wider market, this helps explain why record prices have not drawn the usual wave of scrap. Goldman has noted scrap recovery running behind expectations. With Chinese smelters entering Q4 maintenance, less scrap means more cathode demand, which supports Chinese import premiums.
Supply and demand outlook
Supply risk is back at the centre of the market, and the consensus still sees a 2026 deficit.
Chile. BHP’s Escondida, the world’s largest copper mine, halted all operations on 23 September after a contractor was killed. The halt removed about 3,455 t/day. A gradual restart began on 24 September. Escondida’s supervisors have since voted 95% to authorise a strike, though mandatory mediation must run before any legal stoppage. Workers at Antofagasta’s Centinela have also rejected a final offer. Chile’s August output fell to 369.5kt from 403.4kt in July. Wood Mackenzie flags a further constraint: Chile is structurally short of the sulphuric acid needed for leach production, and Middle East disruption has tightened acid supply.
Balances and forecasts:
| Source | 2026 balance | Price view |
| Morgan Stanley | ~600kt deficit, the largest in 20+ years | Downside if the US rules out refined tariffs |
| Goldman Sachs | 640kt deficit ex-US | End-2026 US$13,735/t; 2027 average US$13,800/t |
| Wood Mackenzie | ~350kt deficit | Structural tightness outweighs China softness |
| J.P. Morgan | 330kt deficit | — |
| ICSG (May) | 150kt deficit | — |
Our read. Goldman’s year-end target sits about 5% below spot, so tariff clarity is the main near-term downside. Supply disruption and China’s scrap squeeze should keep dips shallow.
ConnectOre -A new technology update
The mine you cannot see: in-situ recovery
In-situ recovery (ISR) dissolves copper in the ground and pumps it to the surface. It skips crushing and grinding, which use 30–40% of a copper site’s energy. ISR has the lowest energy intensity of any copper processing route, and it leaves no tailings or waste rock.
ISR is now commercial. Taseko’s Florence Copper produced first cathode in February 2026, the world’s first greenfield commercial-scale ISR copper operation. It is targeting about 14–16kt this year and about 39kt at capacity. In South Australia, BHP funded a 90-day in-ground lixiviant trial at EnviroCopper’s Kapunda project. The trial built on earlier work by CSIRO and the University of Adelaide, funded by the Commonwealth’s CRC-P grants.
The main constraint is the ground, not the chemistry. Low permeability, complex fractures and acid-consuming rock can stop leach solution from reaching the ore. Two frontiers stand out:
- Sulphides: Chalcopyrite holds roughly 70% of global copper reserves. Jetti, Ceibo and Rio Tinto’s Nuton are already leaching it in heaps.
- Electrokinetic ISR: Electric fields drive solution through rock that pressure alone cannot move it through. Lab work on intact porphyry has recovered over 90% of the copper. UWA and CSIRO pioneered the method, and Perth-based Ekion is taking it toward the field.
Read the full piece: The Mine You Cannot See
Sources
- Trading Economics, Copper price and news (to 30 Sep 2026)
- LME, LME Copper (3-month close)
- CRU, Scrap invoicing bottleneck disrupts China’s copper market (25 Aug 2026)
- Bloomberg, Copper hits all-time high amid tariff turmoil (7 Sep 2026)
- TradingKey/Reuters, White House refined copper tariffs remain undecided
- SMM, The US copper tariff trade is fading
- FXEmpire, COMEX–LME premium, July 2026
- CNBC, Fed rate decision September 2026; Schwab, Fed hikes in 12-0 vote
- investingLive, China official PMIs, September
- Reuters via Yahoo, Escondida halts after worker death; Crux Investor, Escondida output and strike vote
- Barchart, Goldman raises copper forecast
- Crux Investor, Morgan Stanley, J.P. Morgan and ICSG deficit forecasts
- Wood Mackenzie, Copper in 2026: will geopolitics trump geology?; Southern Copper, September 2026 presentation citing WoodMac
