International copper prices have experienced a sharp pullback since mid-September following their recent record highs, driven by a confluence of policy shifts, inflation data, and changing market positioning. COMEX copper futures reached an all-time intraday high of 689.4 cents per pound (approximately $15,197 per tonne) on September 9, while LME three-month copper futures briefly touched $14,875 per tonne. However, since September 10, prices have declined significantly.
The spread between COMEX and LME copper narrowed from $783 per tonne on August 25 to $62 per tonne on September 15—a contraction of roughly 92%, according to analysis from China Nonferrous Metals News as reported by SunSirs. The earlier price surge was supported by cross-market arbitrage mechanisms related to US tariff expectations. In August 2025, the US imposed tariffs of up to 50% on semi-finished copper products while exempting refined copper.
Market participants anticipated the US Section 232 investigation might extend to refined copper, creating arbitrage opportunities where traders would purchase LME copper, take delivery outside the US, and register it as COMEX warehouse warrants for resale. This activity reduced deliverable inventories in non-US regions and supported COMEX premiums. When tariff expectations eased on September 10 due to the lack of a final policy decision, the arbitrage premium collapsed.
US inflation pressures have also weighed on copper valuations. The US Producer Price Index for August rose 5.4% year-on-year, while the Core Consumer Price Index rose 0.3% month-on-month on September 11, exceeding market expectations of 0.2% and representing the largest monthly increase since April. These figures prompted reassessment of Federal Reserve monetary policy, with markets strengthening expectations for interest rate hikes.
Both the US Dollar Index and real interest rates have risen, exerting downward pressure on dollar-denominated commodities including copper. Shifts in demand expectations have also influenced prices. Data centers require increasing quantities of copper for power distribution systems, high-speed cable interconnects, and liquid cooling solutions, driving medium-to-long-term demand considerations.
However, recent statements from artificial intelligence executives including those from Anthropic regarding safety risks in frontier models prompted markets to reassess the pace of computing infrastructure expansion, contributing to more rational expectations for copper demand and supporting the recent price pullback. Positioning data reveals concentration of speculative positions. As of the week ending September 8, non-commercial net long positions in COMEX copper futures exceeded 90,000 contracts.
Against this backdrop of high position concentration, copper prices became significantly more sensitive to capital flows. When incremental capital inflows slowed and new bullish factors emerged, profitable position holders closed out trades to avoid volatility risks, triggering the sharp pullback. Despite the recent correction, medium- to long-term supportive factors remain in place.
Copper concentrate treatment charges (TCs) remain persistently low. For the week of September 11, the spot TC index for 25% grade copper concentrate stood at negative $211.7 per tonne, down from negative $172.9 per tonne in early August. TCs for 2026 long-term contracts remain at extremely low levels, reflecting supply constraints facing the smelting sector.
Regional inventory distributions create structural support as well. As of September 11, combined visible copper inventories across the three major exchanges exceeded 990,000 tonnes. COMEX copper inventories accounted for approximately 766,000 short tons (roughly 696,000 tonnes), representing about 70% of the aggregate.
Inventories outside the US totaled approximately 297,000 tonnes, comprising roughly 242,000 tonnes at the LME and 55,000 tonnes at the SHFE. This concentrated distribution in North America with relatively tight supplies elsewhere formed the physical basis for recent cross-market price spread adjustments. Looking ahead, two factors warrant close monitoring.
First, the impact of Middle East developments on energy commodity prices, particularly crude oil. Elevated crude oil prices would increase production and transportation costs for industrial metals while driving inflation expectations and influencing interest rate environments. Second, regional shifts in global visible copper inventories will directly affect cross-market price spread trajectories.
Source: SunSirs (China Commodity Data Group), citing China Nonferrous Metals News
Source: sunsirs.com