Copper and Base Metals: LME Daily — 2026-10-28
Copper prices rebounded this week on stronger-than-expected demand from China and a broader risk-on market sentiment, despite a build-up in London Metal Exchange (LME) stocks. While supply disruptions in Chile have eased following the end of the Centinela strike, global inventory imbalances persist, with US stocks covering over 170 days compared to just 48 days in other markets.
Copper and Base Metals: LME Daily — 2026-10-28
Top developments
Copper Rebounds on Chinese Demand and AI Sentiment Copper prices rose on Tuesday, recovering from earlier lows as sentiment around AI stocks improved and demand signals from top consumer China strengthened. The rally was supported by a broader stock market recovery, helping to offset concerns about rising warehouse stocks.
Chilean Supply Risks Ease as Strikes Conclude The end of the strike at Chile’s Centinela mine has reduced immediate supply risks, contributing to a slight easing in copper prices earlier in the week. However, Cochilco notes that the market remains volatile due to ongoing operational limitations and a new strike at Teck’s Highland Valley mine in Canada.
Aluminium Gains on Tight Supply Aluminium prices rose on Wednesday, supported by a "risk-on" mood and tight supply conditions characterized by low warehouse stocks and recent withdrawals. This contrasts with earlier in the week when aluminium gave up its "war premium," though analysts remain cautious about mixed results for base metals in the coming months.
Inventory Imbalance: US vs. Global Markets A stark disparity in copper inventory coverage has emerged, with US stocks covering over 170 days of demand compared to just 48 days in markets outside the US. This imbalance highlights a refined copper gap of approximately 450,000 tonnes globally, driven by tariff-related stockpiling in the US.
Local view
Chinese Analysts Highlight Inventory Drawdowns Local reports from China indicate a continuous decline in SHFE (Shanghai Futures Exchange) copper warehouse receipts, which fell to 14,593 tonnes on October 27, down 1,626 tonnes from the previous day. This drawdown suggests tightening physical availability in China, supporting the narrative of strong local demand despite global stock builds.
Chilean Focus on 2027 Labor Talks Chilean media is turning its attention to upcoming labor negotiations, with Codelco facing wage talks for 16 of Chile’s 31 major mines in 2027. Diario Financiero has flagged a high likelihood of strikes at BHP’s Escondida, signaling potential long-term supply risks.
Context & numbers
- LME Copper: Benchmark three-month copper traded around $14,242.5 per metric ton earlier in the week before rising on demand strength.
- SHFE Stocks: Copper warehouse receipts fell to 14,593 tonnes (Oct 27), while aluminium receipts dropped to 63,431 tonnes.
- Chilean Exports: Chile exported $46.71 billion worth of copper between January and August, a 34.2% year-on-year increase, even as production fell 7.7%.
On the radar
- Smelter Treatment Charges: Smelters are facing record-low treatment charges (TCs), with some South Korean smelters like LS MnM considering adjustments to concentrate purchases due to the bottleneck in copper concentrate supply.
- US Tariff Limbo: Analysts expect US copper tariffs to remain in a state of "limbo" past January 1, with Macquarie rating a full tariff collapse as the least likely scenario.
- LME Week Insights: Industry leaders at LME Week continue to debate the divergence in base metal outlooks, with supply concerns dominating the conversation for copper and zinc.
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