Copper and Base Metals: LME Daily — 2026-09-02
LME copper prices retreated from record highs as a stronger US dollar and cooling Chinese fabrication demand weighed on industrial metals, with three-month copper falling to $14,133.5 per tonne. Meanwhile, LME zinc stocks plunged 64% in western warehouses, driving prices to a four-year high despite broader market weakness.
Copper and Base Metals: LME Daily — 2026-09-02
Top developments
Copper Retreats on Stronger Dollar and China Cooling
Benchmark three-month copper on the London Metal Exchange fell 0.99% to $14,133.5 a metric ton as a stronger US dollar weighed on industrial metals, reversing some of the recent gains driven by supply fears. This decline follows a period where copper hit a record early Wednesday, August 26, before easing as the immediate supply squeeze faded and the CPER tracker dropped 1.72%. The pullback reflects cooling Chinese fabrication activity, which had previously supported prices amid energy-transition demand.
Zinc Stocks Plunge to Four-Year High Prices
LME zinc prices surged to a four-year high as stocks in western warehouses drained significantly, with open tonnage dropping by 64%. Benchmark three-month zinc initially rose 1.3% to $3,933 a metric ton driven by these supply fears, though it later retreated alongside other metals due to the strong dollar. The tight physical market is evidenced by the backwardation structure, where cash zinc settled at a US$174 premium over three-month metal earlier in the week.
Middle East Tensions Add Volatility to Base Metals
Base metals led lower by copper fell 1% to $14,133 a metric ton as tensions in the Middle East flared up, creating macroeconomic uncertainty that impacted risk assets. This geopolitical pressure compounded the bearish impact of rising Fed rate-hike bets, which strengthened the dollar and further pressured copper proxies and miners like Freeport and Southern Copper.
Tariff Threats Continue to Distort Global Copper Flows
The threat of US import tariffs continues to absorb global surplus, pulling metal into American warehouses and keeping LME inventories near record lows. LME copper stocks fell significantly over the week ended August 28, reaching 107,050 metric tons by August 26, down from 166,775 metric tons the previous week. This structural tightness, exacerbated by tariff arbitrage, remains a key support level for prices despite short-term dollar-driven corrections.
Local view
Río Times Online (Latin America) highlights the divergence between LatAm mining equities and metal prices, noting that while copper futures eased, Chilean and Peruvian supply concerns continue to anchor long-term demand expectations for producers in the region.
Business Recorder (Pakistan) reports that the "strong dollar" narrative is currently the dominant driver for traders in emerging markets, causing broad-based selling across copper, zinc, and other industrial commodities despite underlying physical tightness in specific metals like zinc.
Context & numbers
- LME Copper: Three-month benchmark at $14,133.5/mt (down 0.99%).
- LME Zinc: Three-month benchmark at $3,933/mt (up 1.3% prior to dollar-driven retreat); Cash premium ~$174/mt.
- LME Inventories: Copper stocks dropped to 107,050 mt by Aug 26; Zinc stocks down 64% in western warehouses.
- Cochilco Forecast: Chilean state agency Cochilco raised its 2026 copper price forecast to $5.95/lb but projects a 2.6% fall in national production due to operational interruptions at Codelco and BHP.
On the radar
- Fed Policy Watch: Rising bets on Fed rate hikes are strengthening the dollar; traders will monitor upcoming US economic data for confirmation of this trend, which directly impacts LME pricing.
- Chinese Fabrication Data: Further signs of cooling in Chinese fabrication could pressure prices further, as this sector is a primary consumer of LME copper and aluminium.
- Tariff Implementation: Any concrete steps regarding US copper tariffs will likely trigger renewed volatility in the COMEX-LME spread and global inventory flows.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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