Macquarie’s ‘oversupplied’ copper call: pricing and project signals for mine planners
Reviewed by Tom Sullivan
First reported on MINING.com
30 Second Briefing
Copper’s 16% price slide from January’s record, with May futures now around $12,000/t, is being called “overpriced, oversupplied and over the pond” by Macquarie, which cites more than 1 Mt of visible inventory growth since early 2025 and a 602,000 t market surplus last year. LME stocks are at six‑year highs, COMEX inventories are at record levels, and Macquarie estimates a further 480,000 t sitting off‑exchange in the US, drawn by CME‑LME arbitrage that previously pushed COMEX premiums above $2,000/t. The bank expects continued volatility driven mainly by investor positioning, Iran‑related geopolitics and uncertainty over a potential US Section 232 decision on copper imports by 30 June 2026, rather than by physical tightness.
Technical Brief
- Shanghai Futures Exchange base metals volumes in January jumped 80% versus December, indicating speculative inflows.
- Aggregate copper open interest across NY, London and Shanghai rose by $9.5 billion in Dec–Jan, then fell $24.6 billion through Feb–Mar.
- Macquarie’s 11-analyst commodities team (Geneva, Houston, London, Shanghai, Singapore) attributes the price spike mainly to investor flows.
- COMEX copper premiums exceeded $2,000/t in Dec–Jan before compressing back towards historical levels.
- Estimated 480,000 t of off‑exchange copper in the US is linked to CME–LME arbitrage positioning.
- Excess metal concentration in the US is creating perceived tightness in other regions despite rising global stocks.
- Chinese buyers have resumed spot purchasing as prices eased, with reported weekly inventory drawdowns domestically.
- Outside China, spot physical premiums sit well below contract levels, signalling weak end‑use demand at current prices.
Our Take
Macquarie’s bearish stance on copper contrasts with its recent nickel outlook in March 2026, where it projected a shift from surplus to deficit, signalling that its base metals strategy is now highly differentiated by metal rather than uniformly bullish on ‘energy transition’ commodities.
The earlier January 2026 coverage on potential US copper tariffs and critical minerals policy already framed copper as politically sensitive; Macquarie now calling the market oversupplied suggests policy risk may be a more important support for prices than underlying physical tightness in the near term.
With copper and other base metals featuring in over 260 keyword-matched pieces in our database, this call from an 11-analyst Macquarie Strategy team is likely to be closely watched by project developers weighing whether to advance marginal copper assets versus pivoting to higher‑momentum critical minerals such as lithium, as seen at EnergyX’s Lonestar demonstration plant in Texas.
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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