LME copper surged to a record high of $14,396 per tonne, rising 1.7% in morning trading and extending its rally for a third consecutive session, marking seven straight weeks of gains [1]. The cash/3M spread widened to a backwardation of $518.5 per tonne, the strongest since October 2021, underscoring acute near-term supply tightness [1]. LME inventories declined for the 42nd consecutive session, reaching 204,975 tonnes, their lowest level since February, with nearly half of the remaining stocks already earmarked for withdrawal [1].
The ongoing rally is attributed to several factors: falling LME inventories, expectations of weaker Chilean copper output, and strong speculative net long positions on COMEX [1]. Specifically, Chile's copper commission Cochilco projects national copper output to fall 2.6% year-on-year to 5.3 million tonnes in 2026, due to weaker production from Codelco and BHP operations [1]. Copper prices are now up approximately 16% year-to-date [1].
Speculative activity continues to support the rally, with money managers increasing net long COMEX copper positions by 3,084 lots to 80,880 lots, the highest level since February 2021 [1]. Ongoing flows to the US and China, where copper trades at a premium to LME prices, have further drained global inventories [1].
CONCLUSION
Copper's record-breaking rally is being driven by tightening supply, declining inventories, and robust speculative interest. With output expected to fall and inventories at multi-month lows, market sentiment remains strongly bullish, suggesting continued price volatility and elevated levels in the near term.