Copper prices moved higher on October 12, 2026, as supply disruptions in Chile added fresh pressure to an already weakened market. Benchmark three-month copper on the London Metal Exchange rose approximately 0.3% to US$14,585 per metric ton, while the most-traded Shanghai Futures Exchange copper contract gained 0.9% to CNY 110,630 per metric ton, according to reporting by ScrapMonster. Two simultaneous operational challenges in Chile have heightened market sensitivity.
A fatal landslide struck Codelco's El Teniente mine on October 11, killing two contract workers and prompting Chilean mining regulator SERNAGEOMIN to suspend operations in the affected south-pit area. Heavy rainfall in central Chile triggered the incident. Separately, workers at Antofagasta's Centinela operation began striking on October 7 after contract negotiations failed, with union representatives warning that production could fall by as much as half in November if the action continues.
The market significance of these disruptions lies in the scale of the affected operations. El Teniente produced approximately 310,000 tonnes of copper in 2025, while Centinela produced 240,400 tonnes. Combined, the two operations accounted for roughly 550,400 tonnes, equivalent to approximately 10.4% of Chile's forecast 5.27 million tonnes of copper production for 2026.
Although Codelco stated it has suspended only the affected south-pit area and Antofagasta maintained its production guidance, the simultaneous disruptions at mines of this magnitude in the world's largest copper-producing country have prompted traders to account for the possibility that localized problems could become more significant if they persist. Chile's already weak production backdrop amplifies these concerns. The country produced only 369,500 tonnes of copper in August, down 13% year-over-year and the lowest monthly output in more than 15 years.
Cochilco, Chile's copper commission, expects full-year 2026 output to fall 2.6% to 5.27 million tonnes. Physical market indicators point to strong demand for imported copper in China despite the supply concerns. The Yangshan copper premium, which measures what buyers are willing to pay above benchmark prices to secure imported copper into China, ended the week at US$135 per metric ton, its highest level in four years.
This premium signals stronger competition for immediately available imported metal. Copper inventories in warehouses monitored by the Shanghai Futures Exchange rose to 58,744 tonnes, representing an increase of approximately 20,000 tonnes or roughly 51.6% from end-September. This increase reflects inventory rebuilding after exceptionally low late-September stocks rather than weakening demand, as imported copper can enter exchange warehouses before being consumed or held for financing, arbitrage, or logistics reasons.
The LME cash copper contract has recently traded at a sizeable premium to the three-month contract, indicating that immediately deliverable metal remains valuable even where total global inventories may appear adequate. The geographic distribution of copper inventories has become increasingly important to market dynamics. Commercial copper inventories in the United States now exceed one million tonnes when exchange and off-market stocks are included, according to Reuters estimates.
Market analysts note that copper's latest movement reflects multiple factors beyond single mine headlines. Chile enters these disruptions from an already weak production base, while China is paying its highest import premium in four years for physical copper. Key factors to monitor include the duration and geographic scope of the El Teniente south-pit suspension, the outcome of voluntary mediation talks scheduled for October 13 between Centinela and striking unions, sustained strength in the Yangshan premium, further inventory accumulation at SHFE, widening LME nearby spreads indicating competition for immediately deliverable copper, and whether additional operational disruptions will prevent Cochilco's expected second-half recovery in national production.
Sources: Codelco; SERNAGEOMIN; Antofagasta PLC; Cochilco; Reuters; ScrapMonster.
Source: scrapmonster.com