Copper and Base Metals: LME Daily — 2026-09-12
LME copper prices hovered near record highs around $14,743 per metric ton this week as supply constraints outside the US intensified, driven by a significant slump in Chilean production and weak Chinese imports. While global smelting margins collapsed due to negative treatment charges, the White House's delay in deciding on refined copper tariffs created a pricing divergence between COMEX and LME benchmarks. <!-- /headline --> **Copper Supply Crisis Deepens as Chile Output Slumps and Tariff Delay Persists** <!-- /headline -->
Copper and Base Metals: LME Daily — 2026-09-12
LME copper prices hovered near record highs around $14,743 per metric ton this week as supply constraints outside the US intensified, driven by a significant slump in Chilean production and weak Chinese imports. While global smelting margins collapsed due to negative treatment charges, the White House's delay in deciding on refined copper tariffs created a pricing divergence between COMEX and LME benchmarks.
<!-- /headline -->Copper Supply Crisis Deepens as Chile Output Slumps and Tariff Delay Persists
<!-- /headline -->Top developments
Chilean Copper Production Plunges Amid Operational Setbacks
Chile’s copper output fell 9.4% year-on-year in the first seven months of 2026, with July data showing a continued decline in key mines. Codelco and Escondida reported lower volumes, with Escondida’s output dropping 22.1% to 89,400 tons in July alone. This supply contraction exacerbates the global deficit forecast by the International Copper Study Group (ICSG), directly supporting LME price resilience despite demand-side concerns.
China’s Copper Imports Hit Six-Year Low for August
Chinese copper imports dropped to 382,000 tonnes in August 2026, the weakest August figure in six years, signaling a slowdown in immediate domestic demand absorption. This slump contrasts with record US imports, highlighting a geographic bifurcation in inventory builds. The divergence pressures Shanghai Futures Exchange (SHFE) premiums while keeping LME physical tightness acute outside North America.
Smelting Margins Collapse as Treatment Charges Turn Negative
The Indian Primary Copper Producers Association (IPCPA) reported that treatment and refining charges (TC/RCs) have plunged to unprecedented negative levels, reflecting a severe mismatch between expanding smelting capacity and constrained mine supply. Smelters are effectively losing money on every ton processed, which may force capacity rationalizations or further concentrate hoarding by miners. This structural imbalance is a key driver behind the sustained high LME copper prices, as it limits the ability of the mid-stream sector to buffer supply shocks.
US Tariff Uncertainty Creates Pricing Divergence
The White House missed its June 30 deadline for deciding on refined copper tariffs, leaving the market in limbo. This uncertainty has caused COMEX prices to act as a de facto import duty, diverging significantly from LME benchmarks. Analysts note that no policy decision can resolve supply issues before the mid-2040s due to the long lead times for new US mines, keeping speculative premiums elevated on the US exchange.
Local view
Rumbo Minero (Peru/Regional): The regional mining outlet highlights Cochilco’s recent study recommending optimization of existing Chilean smelter capacity, which operates at only ~60%, rather than pursuing new expansions. This suggests that Latin American stakeholders are prioritizing efficiency gains over capital-intensive growth to address the concentrate shortage, a move that could tighten near-term supply further.
Context & numbers
- LME Copper Price: Three-month copper closed recently at $14,743 per metric ton, down slightly from record highs but maintaining a strong upward trend.
- Chile Production Data: January-July 2026 cumulative production was 731,700 tonnes of fine copper, down from 807,200 tonnes in the same period of 2025.
- China Imports: August 2026 imports stood at 382,000 tonnes, the lowest for the month since 2020.
- Cochilco Forecast: The Chilean copper commission raised its 2026 average price forecast to $5.95 per pound, citing operational interruptions.
On the radar
- US CPI Data: Upcoming inflation figures will be scrutinized for their impact on Federal Reserve rate expectations, which inversely correlate with copper prices.
- SHFE Inventory Trends: Watch for weekly updates on Shanghai warehouse stocks; if they continue to fall while US stocks rise, the arbitrage window may close or widen depending on tariff developments.
- Codelco Guidance: Further operational updates from El Teniente and other major Chilean mines are critical, as they account for a significant portion of global supply disruptions.
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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