International Copper Association Australia

Copper Weekly Brief — week ending 2 October 2026

John Fennell

 

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:

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:

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:

Read the full piece: The Mine You Cannot See

Sources

 

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