Copper prices surged on Tuesday, September 23, 2026, extending a six-session winning streak as Chinese physical demand tightened global supplies and Shanghai warehouse inventories plummeted to their lowest levels since 2023. Three-month copper on the London Metal Exchange settled at $14,783 per metric ton, up 0.8%, leaving the metal just $92 short of the $14,875 record established on September 10, according to Shanghai Metals Market data. Comex copper for December delivery reached $6.871 per pound in New York during the session, within 2 cents of its $6.8885 record settlement from September 9.
The current rally marks copper's longest winning streak in four months, according to Bloomberg reporting. The rally has largely erased the impact of a significant selloff from two weeks earlier, when a Reuters report indicated that the White House's copper tariff plan had stalled over affordability concerns, causing U.S. prices to plummet more than 5% in a single trading session. However, the current price recovery is being driven primarily by physical supply tightness in China rather than tariff-related dynamics.
Shanghai copper cathode stocks fell to 43,900 tons last week, the lowest level since 2023, according to data from Shanghai Metals Market. Inventories in Shanghai Futures Exchange warehouses have declined 70% since early June, with imported cargoes going directly to fabricators rather than into storage facilities, according to Mining.com reporting. The spot cathode premium in Shanghai reached an average of 1,375 yuan per ton over SHFE futures on Tuesday, up 550 yuan in a single day.
Chinese buyers are front-loading purchases ahead of the Mid-Autumn Festival closure on Friday and the National Day break from October 1-7. Several domestic refineries have maintenance scheduled for October and November, adding to seasonal restocking demand. ING commodities strategist Ewa Manthey told Reuters that copper is finding support from tightening physical market conditions in China, with falling inventories and seasonal restocking offsetting the impact of a firmer dollar.
In London, cash copper settled at a $62 premium to the three-month contract on Monday, reversing from an $86 discount a week earlier, indicating strong current demand for physical metal. Cancelled warrants, representing metal booked for withdrawal, climbed to 122,150 tons on Tuesday, representing nearly half of all on-warrant stock and leaving just 133,725 tons actually available to the market. The United States presents a contrasting picture, holding approximately 696,000 tons in Comex warehouses, or roughly 69% of all exchange-monitored copper stocks.
These elevated U.S. inventories accumulated over the past year as importers rushed metal ahead of tariffs that have yet to materialize. Comex warehouse stocks slipped last week for the first time since April, though New Orleans, the main Comex delivery hub, is 82% full with another 100,000 tons expected by the end of October, according to SP Angel analysis. This inventory imbalance has been draining metal from the rest of the world for months.
On the supply side, Sprott Asset Management stated over the weekend that global mined output could fall this year for the first time since 2017. Outages at Freeport's Grasberg mine in Indonesia and Ivanhoe Mines' Kamoa-Kakula in Congo are expected to strip approximately 600,000 tons from expected 2026 production. Chile's supply situation adds further uncertainty.
BHP faces a Wednesday deadline to present its final offer to a union of approximately 1,020 supervisors and staff at Escondida, the world's largest copper mine, whose contract expires September 30, according to Shanghai Metals Market reporting. A rejection would send talks to government mediation before any potential strike, though Escondida's output already declined 22% in July. LME copper is up 18% year-to-date while Comex prices have advanced 21%, having gained roughly 70% from April 2025 lows, according to Bloomberg data.
This rally has been underpinned by demand from electrical grids and AI data centers outrunning mine supply. Veteran commodities strategist Jeff Currie has repeatedly argued that the physical economy is repricing scarcity. Not all analysts are bullish on further gains.
Robert Montefusco at broker Sucden Financial expressed skepticism about the rally's sustainability, telling Reuters that Chinese producers could begin selling if prices climb further. Bloomberg Intelligence's Mike McGlone has cautioned that a broader market correction could reduce copper prices by 20% to 30%. The Federal Reserve's quarter-point rate hike last week, its first since 2023, continues to weigh on industrial metals.
Traders are monitoring this week's meeting between President Donald Trump and Chinese President Xi Jinping for trade policy signals. With China preparing to enter its holiday period, any outcomes from that summit could determine whether copper reaches new record levels before Beijing returns to normal operations.
Source: oilprice.com