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    Copper price near record: LME warehouse squeeze and project signals for engineers

    August 15, 2026|

    Reviewed by Tom Sullivan

    Copper price near record: LME warehouse squeeze and project signals for engineers

    First reported on MINING.com

    30 Second Briefing

    Copper is trading near a record $14,500/t as the LME August contract’s premium over September blows out to $370/t and cash-to-three-month spreads hit $434/t amid a 42-day drawdown in exchange stocks to 204,975 t, nearly half already earmarked for withdrawal. Traders are diverting metal to the US ahead of potential 15–30% tariffs on refined copper and to China as smelters cut output following the DRC’s concentrate export ban, while Chilean supply remains constrained around 5.5 Mt/y and Indonesia’s 342,000 t/y Gresik smelter is offline. BMI now pegs 2026 prices near $13,500/t with “strong upside risks”, as shorts on the LME face the prospect of a warehouse bidding war.

    Technical Brief

    • LME August–September one‑month spread widened to $370/t, matching 2021 squeeze conditions that triggered intervention.
    • Cash-to-three‑month LME spread hit $434/t, signalling acute near‑term tightness for physical offtake planning.
    • CME copper stocks exceed 700,000 short tons (~635,000 t), creating a contrasting US inventory overhang versus LME.
    • DRC concentrate export ban affects <20% of national copper output, yet has outsized impact on smelter feed planning.
    • Chilean output slipped to 5.415 Mt in 2023 from 5.831 Mt in 2018, constraining concentrate availability for expansions.
    • Chilean mine permitting averages 147 approvals per project and can exceed 10 years, delaying new capacity pipelines.
    • Minister Daniel Mas targets 70% permitting time reduction, corporate tax cut from 27% to 23%, plus 25‑year stability contracts.
    • PT Smelting’s Gresik plant (342,000 t/y cathode) is offline after furnace damage; Manyar smelter restart pulled forward to late August.

    Our Take

    The extreme LME cash-to-three‑month spread of $434/t and the $400/t Comex premium over LME echo the late‑2025 copper spike in our database, where similar dislocations preceded sharp intraday reversals, so physical traders will be wary of inventory squeezes flipping quickly into air pockets.

    Chile’s struggle to lift copper output back towards 6 Mt/y despite assets like Los Pelambres and El Teniente, combined with an average 147 approvals per project, signals that permitting and execution risk in Santiago‑centred projects is now as material as geology for long‑term supply modelling.

    Antofagasta, Freeport‑McMoRan, First Quantum, Ivanhoe Mines and Teck all outperforming the underlying copper price over the last ten sessions suggests equity markets are already pricing in a structurally tight copper market, which may encourage more aggressive capex plans even as policy risks in the DRC and Indonesia cloud near‑term concentrate and smelter availability.

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    Prepared by collating external sources, AI-assisted tools, and Geomechanics.io’s proprietary mining database, then reviewed for technical accuracy & edited by our geotechnical team.

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